Life brings about so many circumstances that can cause previous credit issues such as the economic downturn, medical costs, or losing a job. There is hope for a mortgage loan with time as listed below with good re-established credit and rental / mortgage history after the circumstance.
Keep in mind that there are occasional variances to these Short Sale and Foreclosure Guidelines.
Waiting Period For Borrowers with a Short Sale:
VA: No Restrictions (Unless the shortsale was a previously guaranteed VA loan, which will affect the amount of entitlement available on the new loan if VA paid a claim)
FHA: If there were no lates on the mortgage in the most recent 12 months leading up to the short sale, then no restrictions. If there were lates, then there is a 3 year waiting period. 1 year if using the FHA Back to Work Program
USDA: 3 year waiting period
Fannie/ Freddie: If the file is documented that the short sale was due to circumstances beyond the borrower’s control, was a one-time event and not likely to happen again, AND the file receives an approval from the Automated Underwriting System (AUS), there are new guidelines effective May 2015:
- NEW! 2 years mandatory time since short sale. Documentation is required to prove the extenuating circumstance that caused the short sale
Waiting Periods for Borrowers with a Foreclosure or deed in lieu of foreclosure: Keep in mind that the clock starts ticking once the foreclosure is “Finalized” which is when the deed is transferred out of the borrower’s name.
VA: 2 years
FHA: 3 years, 1 year on FHA Back to Work program
USDA: 3 years
Fannie/ Freddie: NEW! 2 years mandatory time since foreclosure. Documentation is required to prove the extenuating circumstance that caused the foreclosure
*** All waiting periods are measured from the transfer date to application date and there are sometimes exceptions to the above****
Team Move lends in areas such as Wilmington, Leland, Hampstead, Jacksonville, Camp Lejeune, Whiteville, Shallotte, Southport, Elizabethtown, Lumberton, Fort Bragg, Pope Air Force Base, Fayetteville, Rockingham, Raleigh, Garner, Smithfield, Clayton, Goldsboro, Charlotte, Greensboro, Winston-Salem, Durham, Chapel Hill, Burgaw, Castle Hayne, Holden Beach, Supply, Ocean Isle Beach, Sunset Beach, Hubert, Tabor City, Carolina Beach, Kure Beach, Laurinburg, Topsail Beach, North Topsail Beach, Surf City, Sneads Ferry, Richlands, Wrightsville Beach, New Bern, Oak Island, Saint James, Wallace, as well as the rest of NC. North Myrtle Beach, Myrtle Beach, Conway, Loris, Little River, Longs, as well as the rest of South Carolina and Virginia.
Author: Russell Smith
Team Move OVM Financial loan officer success is Russell’s primary focus. He provides the tools and techniques he used as a top producing loan officer. Additionally he offers the Team Move OVM Financial Agent Training Program. Sharing is so important to Russell so he works diligently to be a resource to loan originators and Realtors.