Many people in Arizona (and all over the US) ask the question, “how long do I have to wait to buy a home after a short sale?” We also hear questions like, “how long after a foreclosure?” and “how long after a bankruptcy?” too. With these in mind here in 2012 we thought we should provide a run down of the latest time lines.
As you face the decision to either go with a short sale, foreclosure or bankruptcy or you aer recovering a lot of what’s possible after the fact is based on how you handle things as you go through it.
The good news is that you can take advantage of low FHA rates immediately after a short sale if you didn’t miss any mortgage payments and have kept your credit accounts up to date. But, that’s where the buck stops: there’s no taking advantage of other loan programs like VA loan or conventional mortgages following a short sale or other financial problems for several years.
See below for a summary of your options for life after a short sale, foreclosure, or a bankruptcy.
Short sale with FHA Loan
- No waiting period if you were not in default
- 3 year wait if in default at the closing
- Reduced wait if you re-established good credit and can show extenuating circumstances
Short Sale With Fannie Mae Loan
- 2 year wait if you put 20 % down
- 4 year wait if you put down between 10% to 20% down
- 7 year wait if you put less than 10% down
- 2 year wait if you can show extenuating circumstances and put more than 10% down
Short Sale with Freddie Mac Loan
- 4 year wait before being able to get a loan
- 2 year wait if you can show extenuating circumstances
Foreclosure with an FHA Loan
- 3 year wait before being able to get a loan
- Reduced wait if you can show extenuating circumstances and re-establishes good credit
Foreclosure with a Fannie Mae Loan
- 7 year wait from the completed foreclosure sale date
- 3 year wait if you can show extenuating circumstances. Additional underwriting requirements apply for 4 years after a 3 year waiting period.
- 7 year wait for a 2nd home, cash out re-financing, or an investment property
Foreclosure with a Freddie Mac Loan
- 5 year wait from the completed foreclosure sale date
- 3 year wait if you can show extenuating circumstances
If you are trying to decide what is best between completing a short sale or going through a foreclosure in regards to purchasing another property in the future it may all just boil down to the waiting time you are willing to endure. If you have questions about your home buying status specifically in Arizona – please fill out the form below and we’ll get in touch with you shortly.