2016 Buy Again After Bankruptcy, Short Sale, Foreclosure or DIL

by on 1.6.16 in Boomerang Buyers

NOTE:  This page was first created in February, 2011, and is updated as new guidelines are released.  This page is monitored by Boomerang Buyer experts that understand the guidelines, and have successfully guided countless families back into homeownership after significant financial hardship.

2016 FHA Guidelines

  • Bankruptcy – You may apply for a FHA insured loan after your bankruptcy has been discharged for TWO (2) years with a Chapter 7 Bankruptcy.  You may apply for a FHA insured loan after your bankruptcy has been discharged for ONE (1) year with a Chapter 13 Bankruptcy
  • Foreclosure – You may apply for a FHA insured loan THREE (3) years after the sale/deed transfer date.
  • Short Sale / Deed in Lieu – You may apply for a FHA insured loan THREE (3) years after the sale date of your foreclosure. FHA treats a short sale the same as a Foreclosure for now.
  • Credit must be re-established no late payments in past 12-24 months, depending on hardship

Application Date must be after the above waiting period to be eligible for FHA financing after hardship.

Click Here for Current Interest Rates

2016 VA Guidelines

  • Bankruptcy Ch 7 – You may apply for a VA guaranteed loan TWO (2) years after a chapter 7 Bankruptcy
  • Bankruptcy Ch 13 – If you have finished making all payments satisfactorily, the lender may conclude that you have reestablished satisfactory credit.
    • If you have satisfactorily made at least 12 months worth of the payments and the Trustee or the Bankruptcy Judge approves of the new credit, the lender may give favorable consideration.
  • Foreclosure / Deed in Lieu – You may apply for a VA guaranteed loan TWO (2) years after a foreclosure
  • Short Sale – VA does not recognize a short sale as a derogatory event.  If you are able to credit qualify for a VA loan, a short sale would not prevent you from being eligible for VA financing. – Updated 4/2016
  • Credit must be re-established with a minimum 620 credit score

Application Date must be after the above waiting period to be eligible for VA financing after hardship.

Click Here for Current Interest Rates

2016 USDA Guidelines

  • Bankruptcy – You may apply for a USDA rural loan THREE (3) years after the discharge of a Chapter 7 or 13 Bankruptcy
  • Foreclosure – You may apply for a USDA rural loan THREE (3) years after a Foreclosure
  • Short Sale / Deed in Lieu of Foreclosure – If you had big issues the deed in lieu of foreclosure will be viewed as a foreclosure and you would want to wait no less than 3 years if the score is under 640.  Over 640 your UW will make the call but typically not less than one year.
  • UPDATED 12/2014 – Mortgage debt included in Bankruptcy will go by BK discharge date, and and subsequent foreclosure will not count as an additional waiting period, as long as you are off title for any defaulted mortgages.
  • Link to 12/1/2014 USDA Guideline – HB-1-3555  Attachment 10-B  See Page 4 of 6

Date of Credit Approval must be after the above waiting period to be eligible for USDA financing after hardship.

Click Here for Current Interest Rates

2016 Conventional (Fannie Mae) Guidelines

  • Bankruptcy – You may apply for a Conventional, Fannie Mae loan after your Chapter 7 bankruptcy has been discharged for FOUR (4) years, TWO (2) years from the discharge of a Chapter 13
  • Foreclosure – You may apply for a Conventional, Fannie Mae loan SEVEN (7) years after the sale date of your foreclosure.  Additional qualifying requirements may apply,
  • Short Sale / Deed in Lieu of Foreclosure –
    • UPDATED – Effective 7/29/2014:  Waiting period for subsequent foreclosure that was included in Bankruptcy is waived.  If mortgage is included in Bankruptcy, waiting period defaults to FOUR (4) from the discharge date.
    • UPDATED – Effective 8/16/2014:  Short Sale or Deed in Lieu of Foreclosure not included in a Bankruptcy has a new Waiting Period of FOUR (4) years from date your name is removed from title.  This replaces the ability to buy in 24 months with 20% down payment and minimum 680 credit score.
    • SEVEN (7) Years above 90% Loan to Value | with less than 10% Down Payment – Subject to Private Mortgage Insurance underwriting guidelines.

Credit must be re-established with a minimum 620 credit score.

Click Here for Current Interest Rates

Fannie Mae has reduced waiting periods in cases of extenuating circumstances – The death of a primary wage earner seems to be the only one I have been able to identify up to this point.

Date of Credit Report must be after the above waiting period to be eligible for Conventional financing after hardship.

2016 Jumbo Mortgage Guidelines

  • Bankruptcy – You may apply for a Jumbo mortgage loan once any chapter of bankruptcy has been discharged for FOUR (4) years, FIVE (5) years if multiple bankruptcy occurs on credit profile.
  • Foreclosure – You may apply for a Jumbo mortgage loan SEVEN (7) years after the sale date of your foreclosure.  Additional qualifying requirements may apply,
  • Short Sale / Deed in Lieu of Foreclosure – You may apply for a Jumbo mortgage loan:
    • SEVEN (7) Years from Short Sale or Deed in Lieu of Foreclosure with Maximum 80% Loan to Value
    • NOTE: There are investors out there that will allow you to buy again in FOUR (4) years after a short sale, but expect higher rates, higher fees, and possibly larger down payment requirement.  Jumbo lenders have not yet loosened up the qualifying guidelines for buying after a hardship.
    • It may make financial sense to consider a portfolio Jumbo lender that offer high rates, so that you can take advantage of today’s market.  Once your short sale is seasoned, refinance into a more favorable, longer term loan.

NOTE:  If hardship is the result of an extenuating circumstance, waiting periods may be reduced.  Contact lender for details.

Click Here for Current Interest Rates

Portfolio Loans

We are beginning to see more and more portfolio loans in the market that have relaxed waiting periods for bankruptcy, foreclosure, short sale and deed in lieu of foreclosure.  These are not necessarily subprime loans, but they do often have higher interest rates, and higher closing costs.

Portfolio loans are offered by investors that are looking at other compensating factors, like high credit scores, low loan to value (larger down payments), and reserves.

Do not rule out a portfolio loan as a “bridge” to get you into your home until you reach your waiting period for refinancing into a loan with better terms.

Preparing to Buy Again

You should begin looking at your credit at least six (6) months before you are ready to buy again. Quite often there are things left over on your credit report that can delay your ability to qualify. With a little head start and good advice, you can get your credit in line, qualify for financing and buy again.

We specialize in these situations so feel free to drop me an email, call or leave a question below.

1594 comments
User0501
User0501

Hi Scott! It's a month shy of being a full year from being discharged from chapter 7.  My plans are to purchase a home by May of 2017. There were no housing mortgages included in the chapter 7, just a vehicle.  Do I have to wait 4 years to apply for a conventional home loan or is there a waiting period at all?

ScottSchang
ScottSchang moderator

@User0501 Yes, there is a 4 year wait to buy using conventional financing.  FHA financing is only a 2 year wait.  That sounds like your quickest route to homeownership.

If rates are still good, you can refinance out of the FHA loan into conventional once you've hit the 4 year mark.

Jaxatax
Jaxatax

I am currently 32 months post chapter 7 bk discharge. The mortgage was included in the discharge but forclosure just started. Proposed 11/16 sale date. I've rebuilt credit, have some money for down payment. When can I apply for FHA? It should be noted that BK was tied to a business failure. I have since changed industries and I am back on my feet I am glad to say. Thanks. Josh

ScottSchang
ScottSchang moderator

@Jaxatax Hi Josh, FHA is going to count the foreclosure and the bankruptcy as two separate events.  You would be eligible for FHA 3 years from the foreclosure date.  I know, that's not good news, but I do have good news.

Conventional financing is not going to count the foreclosure date as a waiting period.  You will be eligible to buy using Conventional financing in 4 years from the discharge of the bankruptcy.

Hope this helps?

Jaxatax
Jaxatax

Is there portfolio products for this situation? Would I be eligible now for FHA as no for leisure has taken place and I have not been personally responsible for the mortgage for almost 3 yrs? Also, what about the FHA hardship waivers of waiting periods? Could that apply in this case? Sorry, I know a lot of questions.

ScottSchang
ScottSchang moderator

@Jaxatax Definitely not a lot of questions Josh, I totally understand.  As far as hardship waivers, you're talking about an extenuating circumstances exception.  This exception is pretty much only granted if there is a permanent disability, or death of a primary wage earner resulting in a significant and permanent loss of income that let up to the BK and eventually foreclosure.  Not usually an option.

There are portfolio products, but not until after the foreclosure is complete.  Even though your foreclosure will not show up on your credit, and you cannot get a deficiency judgement after the foreclosure, you are still the owner of the home, and your mortgage is in default.

There is nothing you can do until you get that lien removed by either foreclosure, short sale, or deed in lieu of foreclosure.

If you were to look at a portfolio product in this scenario (1 day from foreclosure), you're looking at 20% down, and interest rates in the 7%-8% range, depending on your credit scores.

Swerl
Swerl

I am currently trying to buy a home with a FHA loan. My home was sold at a foreclosure sale on Sept 27, 2013. The mortgage broker is saying that we can go ahead and apply for a mortgage but not close until after Sept. 27th. Is she correct? Everything I've read states that I can't even apply until after the 27th.

ScottSchang
ScottSchang moderator

You are correct. You cannot get a FHA case number until after the 27th. If the loan on the foreclosure was a FHA loan, the 3 year waiting period starts when the FHA mortgage insurance claim is paid. That can be months after the foreclosure.

js510mx
js510mx

Hi, I live in Michigan and had a short sale 2- 1/2 years ago. Wondering when I can for sure but a home again. My credit score is 720+ and I have 10k plus to put down. Thank you

ScottSchang
ScottSchang moderator

@js510mx  "When" you are eligible to buy using traditional loan programs, will depend on what kind of financing you're trying to use to buy the new home.

Using Conventional financing, you can buy in 4 years from the short sale date.  Using FHA financing, you can buy in 3 years from the short sale date.

Hope this helps?

Jusjamn
Jusjamn

Hi Scott,


We had a foreclosure Jan 2014. Since we are nearing our 3 year period, we contacted a lender to inquire about what is required for preapproval. We were told that we would qualify, but even if we put a 50% down payment on the new house, we would be required to pay PMI for 11 years after loan origination and that is the standard for all lenders. Is that true?


Also, we were told there are state limitations on the amounts of the loan we can purchase by county in Nevada. For instance, they said a home in Douglas County can be for a maximum loan amount of $284,000 with no exceptions. Is that true as well?


Thank you

ScottSchang
ScottSchang moderator

@Jusjamn Was the mortgage included in a bankruptcy?  If not, it's a 7 year wait from the foreclosure before you would be eligible for conventional financing.  You would be eligible for FHA financing 3 years from a foreclosure, and yes, there are maximum loan limits based on the County you are buying in.

As far as FHA mortgage insurance goes, unfortunately it is required as long as you have a FHA mortgage.  Don't be frustrated by FHA.  It's a great program if you can buy in that price range, or have the down payment to bridge the gap between the loan amount, and the purchase price.Hope this helps?

Jusjamn
Jusjamn

@ScottSchang @Jusjamn 

Scott,

No, there was no bankruptcy. So it sounds like for the next 4 years, our only option is FHA and anything beyond the loan limits will need to be our down payment. That certainly works for me.


Regarding the PMI, I'm not sure if you answered the question. Specifically, if I have a foreclosure on my record and now pursue an FHA loan putting 20% or higher down payment, will I be required to pay PMI? The lender we contacted said it didn't matter if we put even 50% down - if you have a foreclosure on your record you are required to pay PMI regardless of how much you put down.


Thanks!

ScottSchang
ScottSchang moderator

@Jusjamn @ScottSchang the foreclosure has absolutely nothing to do with FHA mortgage insurance.  Unfortunately, mortgage insurance is required for any FHA loan, regardless of the loan to value. 

The way you are relaying the lender's communication with you, that person sounds like they are not explaining things well, don't have very much experience, or they are just a jerk.  I would look for another lender.

You're good to go using FHA in January 2017 :)

Jusjamn
Jusjamn

@ScottSchang @Jusjamn  Just got this on another website:  "FHA loans require borrowers with less than 20 percent equity in their homes to pay private mortgage insurance (PMI) premiums. Those premiums protect the mortgage lender in case of default by the homeowner. The U.S. Department of Housing and Urban Development (HUD) requires an upfront PMI premium of 2.25 percent of the total loan amount, due at loan closing. You will continue to pay a monthly PMI premium along with your scheduled principal and interest on the loan until you achieve 20 percent equity in your home. Calculating the monthly PMI charge is a two-step process.


Sorry if I'm missing something here, but in my mind, if I put 50% down payment, I already have achieved > 20% equity in my home. But you stated above that PMI is required for any FHA loan, regardless of the loan to value.



ScottSchang
ScottSchang moderator

@Jusjamn @ScottSchang The internet is a funny thing.  This information you posted is 100% wrong.  It sounds like it was written by someone overseas to help create generic mortgage content for a website.

The 2.25% upfront MIP (PMI is for conventional loans) was reduced to 1% in October 2010, then changed 4 more times since.

The last change that FHA made was to make the MIP permanent for the life of the loan.  Unfortunately, in the world we're in today, you might have to use an FHA loan as a bridge until you're eligible to refinance out of it, and remove the MIP, by getting into a conventional loan.

ehess31
ehess31

Hi Scott,

I had a deed in lieu of foreclosure in February of 2014. Last month it was removed from all three credit reports. Can I get a mortgage without waiting till March of next year? My fico score is 703.

Thank you

wanthomenow
wanthomenow

Hi Scott,

I had a chapter 7 bankruptcy discharged in September, 2015. If I get a cosigner, will I be able to get a home loan? My credit score is 663, my DTI is <10%, and I don't have a late payment since the BK.


Thanks!

wanthomenow
wanthomenow

@ScottSchang 
Thank you for the quick response! There was no mortgage in the BK. Just a car and some credit cards (yay divorce!). I will look into the portfolio loan as well as see if my cosigner would be willing to put the loan entirely in their name.

Thanks for your help!

ScottSchang
ScottSchang moderator

@wanthomenow this is a great question, and I actually get this a lot.  A co-signer cannot make an ineligible buyer an eligible buyer.  Co-signers can only be used for income qualifying purposes.

There are portfolio loans available that an make loans at a little higher rate and fees, but if you absolutely need to buy now, you have limited options.

Your co-signer can also buy the property as a non-occupied property, and you can live in it and pay the mortgage payment until your BK is seasoned.

Was there a mortgage included in the BK?  If there was, it could change your eligibility timeline.

Terinbboy
Terinbboy

It was not, I did not file for bankruptcy. And foreclosure never took place and the sale price was market value.

ScottSchang
ScottSchang moderator

@Terinbboy The foreclosure not taking place will avoid the waiting period of 3 years for FHA, or 7 years for conventional, however, in order for the mortgage to be in foreclosure, it would have been severely delinquent at the time of sale.

The automated underwriting engine will pick up on the fact that the mortgage was delinquent, and will factor that into any results.  Your new lender is going to want to see a minimum of 12 months with no late payments on that mortgage.

You definitely saved yourself years of "waiting" by doing the sale.  

Terinbboy
Terinbboy

Hi Scott, I received forclosure paperwork last year but I was able to sell my house in January for the full asking price, thus avoiding foreclosure.

Am I able to get a mortgage? I have a hefty down payment and my only debt is a car payment at this time. Thanks!

ScottSchang
ScottSchang moderator

@Terinbboy Chances are, the lender is going to need a minimum 12 months with no late payments.  It really just depends on how it shows up on your credit report, and how Fannie Mae's Desktop Underwriter reads the information on the credit report.

You may have an option with a portfolio loan if you cannot get the approval now.  Was the mortgage discharged in a bankruptcy by any chance?

mcmcdo2
mcmcdo2

Hi Scott, I live in Ohio. Here is my situation...My Chapter 7 Bankruptcy was discharged on 8/14/2012, my house was included in that, and I moved out after the bankruptcy. Before I filed bankruptcy I lost my job, and missed mortgage payments. I got forecloser papers, and that is why I filed bankruptcy. The house was finally bought back by the bank from a sheriff sale in march of 2016...yes a few months ago. When would I be eligable to apply for a coventional loan, and do you know anyone who could help? Thank you for your time Sir. Also, Imy credit score is 683, I make 80,000 a year and my only debt is a $2500 credit card.

ScottSchang
ScottSchang moderator

@mcmcdo2 You would be eligible to use conventional financing in 4 years from the BK discharge date.  If lenders are telling you different, they may be thinking of FHA guidelines.

dceber
dceber

The letter this was in was dated June 23rd. I think we answered the questions for them. The Loan officer said the other day that the only questions the Loan processor still had was about our earnest money and our home insurance info.

ScottSchang
ScottSchang moderator

@dceber you should really be aggressive with your loan officer and ask these questions of them.  It sounds like there may still be questions.  If your conditional approval stated that they needed information about your BK, you're going to want to make sure that these conditions have all by signed off by the underwriter.

My experience tells me that the longer it is that you don't have an update, the more likely it is that there are challenges.

dceber
dceber

Scott,

We received information from you before and greatly appreciated it. We think we are possibly close to getting our loan approved. The loan officer told us that our loan request was sent to a PMI company last week to be approved. We received our appraisal and the property was appraised for the purchase price. Does it sound like we are close? We had received a Loan Commitment letter from the bank about two and 1/2 weeks ago that included a list of things they needed from us to approve the loan. All of these things were submitted immediately. Our realtor requested a Loan Commitment Letter at the end of last week that was dated for July 9, and it was the same letter that we received 2 and 1/2 weeks ago? I think they sent her the same letter with a different date? We are just confused as to whether we are close or not?

Thank you, Dave

ScottSchang
ScottSchang moderator

@dceber It sounds like it's made it through the lender's underwriting process Dave, that's a good sign!

dceber
dceber

They noted on the Loan Commitment Letter that we need to confirm that we have not sold a property within the last 7 years for less than half of it's full value. Our foreclosure date was Sept. 2013 and it was under a Chapter 7 that was discharged in Sept. 2010. We did not sell our property, it was taken back by the bank. Not sure if they are concerned about the dates. 

If it goes for PMI review, does that mean we're close.

Thank you,

Dave

ScottSchang
ScottSchang moderator

@dceber That wording really concerns me. There is no guideline that states that you cannot sell a home included in BK for less than 50% in the last 7 years.  Did you introduce you to this lender?  

Maybe they want to make sure that the foreclosure is the only hardship and that there were no short sales on other properties?

I have no way of knowing whether you're close or not.  Those comments concern me, but the fact that they are sending it to the PMI company for prior approval seems to be a good sign.

Hairs2you
Hairs2you

When my Mom passed we refinanced her mortgage into our name and cashed out my brothers portion of the equity. We tried renting our original home we had for 7 years and our first renter broke contract and damaged the home. After fixing up and trying to re-rent, we couldn't make both mortgages. We were able to complete a short sale. Now, we'd like to refinance and not do fha. We have 40% equity and have never missed a payment on any home that wss primary residence. Its been 3 years. Are there lenders out there that will do a conventional non fha?

ScottSchang
ScottSchang moderator

@Hairs2you there are lenders out there that will do a portfolio loan with no mortgage insurance, but I think you're too quick to dismiss FHA as an option.  FHA is going to be the least expensive, lowest rate, lowest payment option you can get until you can qualify for a conventional.

I give this advice all the time, and It really comes down to the math.  If you have a high rate and payment now, or need cash out (especially if you are taking cash out) a FHA loan is the way to go.  Rates are so crazy low on FHA mortgages right now, it's a great way to ride out the next year, and then refinance into a conventional and remove the mortgage insurance.

The portfolio loan option will not have mortgage insurance, but the interest rate and fees associated with this conventional "alternative" will be much greater than the minimal investment associated with FHA.

Don't be afraid of FHA, it's an unjustified fear.  Hope this helps?

Hairs2you
Hairs2you

It's the upfront premium and the monthly mip that's such a turn off. We will just have to wait until the full 4 years to do a conventional. Rates are so great. Would love to get out of our 4.75 and into a 3.5 or so.

ScottSchang
ScottSchang moderator

@Hairs2you I couldn't disagree with you more here.  At 3.5% interest rate, you could generate enough lender credit to pay the upfront mortgage insurance premium in it's entirety.  This way your loan balance does not increase.  Even if you do pay monthly mortgage insurance (which is tax deductible in 2016), the difference between 3.5% and your current 4.75% makes this a no brainer.

I completely understand where you're coming from, I'm just telling you that the math does not work out in your favor if you wait.

Hope this helps.

raymay
raymay

My husband and I will be three years out from our short sale this coming December, and looking to buy in the new year. How are RD and FHA loans different besides the down payment? Are there points with an RD loan? how do i shop for a lender that is familiar with a loan purchase after a short sale? 

Thank you!

Rachel

ScottSchang
ScottSchang moderator

@raymay There are a lot of similarities between RD and FHA.  Both have an upfront mortgage insurance premium that is financed into the loan, and both have a monthly mortgage insurance premium.

RD is much more strict with income.  There are 3 separate income qualifying calculations, and the final qualifying criteria is that you have to have a minimum amount of disposable income after your monthly bills with RD.

FHA tends to be a lot more flexible with your debt to income ratios, and there is no income limitation.

There shouldn't be any points with either loan since the loan officer is paid by the investor, not the buyer.

I would say that it ultimately would come down to whether or not you have the down payment.  I think both loans are fantastic options.

You also shouldn't have any challenges finding a lender that understands the guidelines, short sale should be pretty cut and dry.

If you would like, shoot me an email with the State you're trying to buy in, and I can make an introduction to someone that I know and trust, and is familiar with these guidelines.  My email is scott@findmywayhome.com

dmriz
dmriz

Can you refer me to a lender who would consider a mortgage 3 years after chapter 7 bankruptcy? we have rebuilt our credit and have low debt to income ratio. We are looking for something other than FHA because the townhouse complex will not apply for approval. 


it seems the companies I'm finding are very disreputable and even scams. 


thank you

ScottSchang
ScottSchang moderator

@dmriz FHA, VA and USDA financing will allow financing after a Chapter 7 bankruptcy.  If there was a mortgage included in the BK, that might change the guidelines.

If you would like to shoot me an email with the State you're buying in, I can see who I know and trust that I can introduce you to - scott@findmywayhome.com

mknosco
mknosco

My BK discharged in 2005.  My mortgage was included.  I never reaffirmed the mortgage.  It was foreclosed 11/09 and I was sent a letter from the mortgage company that I was not held responsible for the debt.  It was never on my credit.  I have gone under contract for a home and was called today asking about the foreclosure just under 7years ago.  I didn't understand that it was a foreclosure since it was included in the BK.  Am I unable to get a mortgage because of this.  I need a conventional loan.  Thanks.

ScottSchang
ScottSchang moderator

@mknosco Yes, you would be eligible for a Conventional loan as far as waiting periods go.  What State are you buying in?  I can introduce you to a lender that understands the guidelines and can help.

helpwithfha
helpwithfha

Good Evening,


We were forclosed on in January 2013.  We are in the process of closing on a home as of June 30, 2016.  Around 21 days prior to that date, we were notified by our mortgage lender that we had a CAIRVS flag.  We have contacted FHA multiple times with copies of the Sherriffs deed which has a date of January 2013.  Bank of America drug thier feet and didn't file until August 2015.  HUD says we are not elligible until August 2018.  Which date is the date that we can finally purchase a home?

ScottSchang
ScottSchang moderator

@helpwithfha If the mortgage that was foreclosed was a FHA loan, then your waiting period is 3 years from the date that the Mortgage Insurance Claim was paid.  Was your mortgage discharged in a bankruptcy by any chance?

Also, how much do you have for a down payment?  There might be some creative financing options available that will help you.

What State are you buying in?

tcaudill1948
tcaudill1948

Hi Scott,


We had a bankruptcy in 2013 and the trustee allowed us to do a short sale outside of the bankruptcy.  We completed the short sale on 11/6/13 and were discharged from the Chapter 11 bankruptcy on 1/7/14 so both events were more than 2 years ago.  Do you know of a lender who would do a portfolio loan on home price of $360,000?  I have solid income, re-established credit with a score of 683 and can put 20% down.


zlatevm00
zlatevm00

Hi, my old property was sold on foreclosure sale in October of 2010. In November of 2013 I have purchased the new house with FHA loan. My question is when I can switch to conventional loan and do I need to pay 20% down if the property price is up approximately 25%? 

Thank you!

ScottSchang
ScottSchang moderator

@zlatevm00 If the mortgage was not included in a Bankruptcy, there is a 7 year waiting period after a foreclosure before you can be eligible for conventional financing.

You do not need 20% down.  If you loan balance is greater than 80% of the value of your home, you would need to have private mortgage insurance.  PMI may or may not be less expensive than FHA mortgage insurance, depending on your loan to value and your credit score.

The good thing about PMI is that you can remove it once the principal balance on the loan is under 80% of the value of the property.

bocagirl54
bocagirl54

Hi, my husband and I live in Florida, had Chapter 7 discharged in January 2011, short sold our home which will be 3 years August 2016. We both have credit scores in the 700's now. We have been renting for almost 3 years and want to start looking to buy a condo. Will we have a difficult time financing if it's not exactly 3 years?

ScottSchang
ScottSchang moderator

If the mortgage was discharged in the bankruptcy, you are eligible for conventional financing 4 years from the discharge date. You would be eligible now.

If you apply for FHA financing, and if the lender doesn't know any better, there is a 3 year wait from the short sale, and you would not be eligible at this time.

If you would like, shoot me an email to scott@findmywayhome.com and I can introduce you to a lender that can help.

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