Buying after a Short Sale

Can I get a loan after a short sale on my home?

Each loan program has different guidelines regarding loaning after a short sale.  Banks also have their own overlays.  In addition, a lot will depend on how the original lender reported the short sale results to the credit bureaus.  If there were 120+ day late payments on the mortgage this will most likely be reported as a foreclosure and not a short sale.

Below are brief guides for eligibility for new financing if the transaction was reported as a short sale:

FHA  - All three of the following criteria must be met.

• Current on mortgage payments and other debt at time of the short sale
• Lender took proceeds as payment in full
• Short sale was in a different market area than where you are trying to buy

Note: If the borrower was in default on the mortgage at the time of the sale there is a waiting period of 3 years from the time of the sale.

VA

• VA considers short sale same as foreclosure so follows VA foreclosure guidelines.

CONVENTIONAL

• Waiting period of 2 years from time of sale 80% of the lower of appraised value or purchase price.
• Waiting period of 4 years from time of sale 90% of the lower of appraised value or purchase price.
• Waiting period of 7 years from time of sale maximum loan to value current guidelines will allow for your area.

Keep in mind, the determining factor is going to be how the short sale is reported by the credit bureaus.