Hi I am in Thornton Co. We r looking to buy again after loosing our home 4- 5 years ago. short sale started 2010 finished in 2011. We have been renting and have paid on time. our rent is 1,400. our credit we all checked r in the 60's. husbands 621,625. mine, 620, 640, and my daughters is the highest at 653 and 669. She will be living with us. Do you think we have a good chance of buying a house . the interests rates r so low . and our rent id ridiculous! We might only have 1,000 or 2 to put for down payment.
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2015 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 with a 640 minimum credit score
Application Date must be after the above waiting period to be eligible for FHA financing after hardship.
2015 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 - You may apply for a VA guaranteed loan TWO (2) years after a foreclosure
- Short Sale / Deed in Lieu - You may apply for a VA guaranteed loan TWO (2) years after a short sale, unless it was a VA loan then restrictions apply
- 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.
2015 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 subsequent foreclosure, short sale, or deed in lieu of 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.
2015 Conventional (Fannie Mae) – UPDATED 12/2014
- 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.
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.
2014 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:
- FOUR (4) Years from Short Sale or Deed in Lieu of Foreclosure with Maximum 80% Loan to Value
NOTE: If hardship is the result of an extenuating circumstance, waiting periods may be reduced. Contact lender for details.
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 in the lowest priced real estate market that California has seen in years and years!
We specialize in these situations so feel free to drop me an email, call or leave a question below.
Branch Manager at Broadview Mortgage Long Beach, California, I am passionate about educating and empowering consumers. Feel free to call, text or email me at (562) 999-1355 or ScottS@broadviewmortgage.com
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My ex-wife is on the loan to the home I still live in and I pay her rent for the mortgage. My name is still on the title of the house and now the problem... She has only been paying principle and interest and not taxes. We were going to split the equity when the house was sold and now she tells me that she might have to have the house foreclosed or she might claim bankruptcy because she can't afford to make-up delinquent payments. I wanted to buy a small house with a VA loan but will I now be able to because of the disclosure form I have to sign about foreclosure. Because there won't be much equity left over after the bank gets through with it, can I quit claim my name off the deed to the mortgage company so that I'm not involved in the foreclosure, or am I screwed!
@graphicsmith1972 You can quit claim off anytime you like if your name is not on title. A lot of has to do with how the divorce decree is written up to describe the distribution of assets.
If you have equity, why would she foreclose? Just sell the house, pay back the past due amount, and move forward from there? Hope this helps?
I co signed for my father's home 13 years ago. He passd away November 2013. I did everything I could to save the home but I was not able to. The house foreclosed in September 2014. I live in Nashville TN and the rental properties has double and even triple in most places.It is expensive to rent anything here. I'd rather buy a home instead. My credit score did take a hit but now it's in the low 600's. I have maintained a job for 19 years straight. I spoke with FHA and was told due to the circumstances of my father's death I may be able to work with a lender. Could you please tell me what can I do to purchase a home?
@renee225 This is a going to be a bit of a challenge. It sounds like the advice you were given is considering this an extenuating circumstance. You are going to need to speak with a few lender before one of them knows how to navigate through this challenge. Worse case scenario, you may have a waiting period before you are eligible to buy again, and that will most likely be an underwriter's call.
Unfortunately I cannot lend in TN.
Hope this helps?
I went through chapter 7 Bankruptcy in 2009 that included the mortgage loan. The foreclosure did not happen until 2013. Will I be able to take advantage of the new changes?
@tbradford28 Yes, it sounds like you meet the Fannie Mae guidelines which would allow you to use a 4 year waiting period from the discharge of the BK, with no additional timeline for the foreclosure that took place after the discharge. I have encountered many lenders that are not familiar with this guideline. If you're in CA, I can help, if not, I might be able to recommend someone if you encounter challenges finding a lender that can help.
I too included my mortgage loan in a chapter 7 which was discharged in 2009, but the foreclosure did not happen until 2012.
It sounds as though I am eligible for the FM Conventional as well? Is a 10% down payment required?
Do you have any lenders you could recommend in the Grand Rapids, MI area?
I had to short-sale my home in Dec 2013 so my son could go to a special education school in another town. I am now wanting to build a home on a lot I recently purchased. How long do I have to wait to get a mortgage? I am getting different answers... very frustrating
@Tisha Markette Hi Tisha, If there was no Bankruptcy involved, the guidelines for buying after a short sale will depend on the type of loan you are applying for.
There is a 4 year waiting period to use Fannie Mae, conventional financing, 3 year wait to use FHA or USDA, and a 2 year wait if using a VA mortgage.
If you are looking for a loan to do ground up construction, that is a specialized type of financing that is not securitized the way that Fannie,FHA,USDA or VA is - and those specialized lenders will have their own guidelines. They may also be more lenient in considering the reason for your short sale than standard financing would allow.
Hope this helps?
I UNDERSTAND A NEW LAW HAS BEEN PASSED AND YOU CAN BUY A HOUSE AFTER 2 YR. FORECLOSURE. IT WAS JUST PASSED 4/10/2015
@calilady I am not familiar with any new guidelines, do you have any more information?
I had chapter 7 discharged Feb 2011. The house was included ; I vacated the house before I filed chapter 7.However foreclosure is still pending. I am interested in buying at this current time, but I am unable due to the property has not foreclosed yet. Once the property forecloses do my seasoning time starts or does it go by the bankruptcy discharged date of Feb 11? If I hire a lawyer is there a possibility to speed up the foreclosure process?
@mapis the waiting period depends on what kind of financing you are using to buy the new home. If you are using conventional financing, once the home is foreclosed, you can buy again 4 years from the discharge date of the BK - which would be right away (Feb 2015). If using FHA, your waiting period begins from the date of the foreclosure.
I am not sure that an attorney would speed things up, but if you vacated, and I assume stopped paying on the home over 4 years ago, it does not seem that the lender is eager to foreclose.
A deed in lieu of foreclosure would be quickest, and maybe a short sale would even be quicker than the foreclosure.
Hope this helps?
@ScottSchang @mapis Thanks for your answer. This will definitely help. I used my VA COE for this loan. I am planning to go VA this time again using my wife's COE. She will not qualify for the loan alone because of DTI.
As far as the bank, I believe unless I intervene in some way, the bank is never going to foreclose. I called them and they do not have an estimate of when this will be completed. Hopefully an attorney can help speed up this process and get the property off my name.
Once the foreclosure is done, what is the VA waiting time?
@mapis @ScottSchang VA will use the foreclosure, short sale, or DIL date to begin the "buy again" clock. If the defaulted loan is VA, and you're buying again using VA, it may go from the date that the guarantee was paid. Either way, it's 2 years from the date your name comes off of title.
Your best bet may be to purchase using conventional financing as soon as you can get the lien removed, and look at VA in the future possibly to remove the mortgage insurance.
The builder dissolved his S corp and formed a new one and is in business despite five lawsuits against him.
Thank you for your prompt reply. I guess we need a lot of prayers now.
We live in PA. We have paid interest on te loan for the past 7 years and never missed a payment. The total loan is for $409,000 and there is a balance of $99,000 left to finish the last details of construction. We purchased the heating unit, all major appliances, garage doors, windows, all the bathroom fixtures and put in the septic system with our own money. The major issue is the trusses that were installed incorrectly by the original builder. We could get no-one to work on them. I have met with the Truss company and the Engineer and he explained what needs to be done for them to pass inspection. I can do it but I have a business with emploees who count on me to get them work everyday to feed their families. There is only so much time in a day. We have all the other contractors lined up and ready to come in and do the finish work. Drywall and installation of kitchen and bath fixtures. No one wants to touch those trusses. We only need to get the occupancy certificate and get in there. We are so close. The home is a 3,000 square foot home built on a five acre lot which we owned prior to construction. What the market value after completion would be ??? I know the bank will be owed $409,000.
@Mac truck This is a tough one, I'm sorry, I don't know what you could do other than try to find a loan to replace that one. The loan to value would have to be pretty low for anyone to lend on this deal, especially since it's not livable at this point (at least as far as inspectors are concerned). And of course, going after the builder is not an option, because he went out of business, right?
MY WIFE AND I SECURED A CONSTRUCTION LOAN SEVEN YEARS AGO OUR LOAN AMOUNT IS 402,00. THE HOME BUILDER WALKED AWAY FROM THE SITE AFTER 9 MONTHS LEAVING MAJOR PROBLEMS WITH THE PROPERTY. WE HAVE TRIED YEAR AFTER YEAR T GET SOMEONE TO TAKE OVER CONSTRUCTION TO NO AVAIL. I HAVE TRIED MYSELFTO DO THE WORK BUT MAJOR ONSTACLES STOOD IN MY WAY. MY TRUCKING BUSINESS HAS SUFFERED MAJORILY AND I AM IN TAX DEBT ALL DIRECTED AT THIS. THE BANK GAVE US UNTIL APRIL FIRST 2015 TO COMPLETE. WE HAVE CONTACTORS WORKING BUT IT WAS NOT FINISHED AND WE ASKED FOR ANOTHER 30 DAYS. THE BANK REFUSES AND HAS CALLED IN THE LOAN. WE DO NOT HAVE FINANCIAL MEANS TO GO ANYWHERE FOR HELP, WE HAVE SUNK $150,000 OF OUR OWN MONY INTO TRYING TO FIX THE DAMAG DONE BY THE ORIGINAL CONTRACTOR AND OTHERS WE HAVE HIRED TO TRY AND GET THE HOUSE COMPLETED. IT SEEMS LIKE WE ARE PAYING FOR THINGS 2 & 3 TIMES.
THE LAWYER WHO FILED THE LIEN AGAINST THE ORIGINAL HOME BUILDER WHO WALKED AWAY IS NOT CALLING US BACK. WE HAVE NEVER MISSED A PAYMENT ON THE INTEREST OF THE CONSTRUCTION LOAN.
WE AVE BEGGED THE BANK BUT THEY ARE NOT BUDGING. WE REMINDED THEM THEY HAVE A RESPONSIBILTY BECAUSE THEY LET THE HOME BUILDER WALK AWAY EVEN THOUGH THEY NEW HIS WORK WAS FAULTY.
IS THERE ANYTHING YOU CAN ADVISE US AT THIS TIME.
@Mac truck I'm really sorry you find yourself in this mess, what a nightmare! What is the balance of the loan you owe, and what is the value of the home once the construction is complete?
The second question I have is, if you can get more time, do you have the money to complete the construction?
I ask these questions because if there is enough upside potential, and equity, you may be able to find a private lender to give you a bridge loan for the duration of the time that it will take to complete the construction. Once the home is finished, you can refinance into a permanent loan, and restore some of your savings that you've spend on this project.
Last question - what State are you in?
Hello my wife and I are in the process of short selling a rental property and our primary residence. Our primary home has excellent payment history along with all of our other accounts. Despite not paying on the rental property since 2011, our credit scores remain in the mid 600's. Our plan after selling both homes is to rent for two years with the plan to get a jumbo mortgage in two years with at least 20% down. Is this feasible?
@HandT to qualify for the purchase of a primary residence using Jumbo financing, your waiting period is 4 years from the date that your name is removed from title. 20% would be required as well.
@HandT @ScottSchang There are definitely options. You are looking at private money. High interest rates, high cost. Nothing you would want to keep for more than a year or two. Michael Evans left his phone number as a reply to your comment, but I do not know him. I cannot say whether or not he is reputable, or experienced from my personal experience. If you do reach out to him, please report back to me so that I know if he is someone we can endorse in the future!
What State are you trying to in?
Hi Scott, in October 2012 we had a foreclosure. I see you posted children don't qualify as extenuating circumstances, but we had triplets which is usually a once in a lifetime event. There were large expenses we had to pay due to having triplets and my wife returning to work. For example, formula ($1000/month), nanny ($1500/month), and increase in other monthly expenses, such as groceries, utilities, insurance, etc. ($1200). My wife was furloughed ($800) and I had a loss in income ($800). There was a 30% change in our finances. If these qualify as extenuating circumstances, can we obtain a non-conforming loan for approximately $500,000 now? Our scores are above 740 and we can put approximately 10% down.
hi scott. we filed chapter 7 in January 2015. we pay car payment and rent and pay consolidation on student loan. our lease is up in October 2015. we have to give 90 day notice to move out in july if we like. what do you think of a lease purchase
Hello. I co signed for my father's house 13 years ago. He passed away 11/2013. I tried everything I could to save the house but I couldnt. The house was sold back to the mortgage company September 2014. Now it only shows on my credit report as closed account. I live in TN. How long will I have to be able to buy my own house? My credit score is awful right now its 596. I'm in a slump because my father didnt have the time of insurance that he passed away the house would be paid for........ HELPPPPPPPP are their any stipultations for co borrowers if the primary owner pass away??????
Hi Scott here is our situation we filed ch 7 bk and included a fha home loan that has been discharged 2 yrs dec 23 2014 the problem we are having is the home was never foreclosed on the deed is still in my husbands name and we are confused on when and if we will be eligible for any type of home loan we have gotten many different answers please help!!!!
Thank you for your reply Scott!
If we wait until 4 years after our chapter 7 was discharged, is the down payment a mandatory 10% since the mortgage was included?
Is there anyway our lenders underwriter can get the fha to approve a loan by the date of the sheriff's sale, instead of the 3 years after the claim was paid? We don't qualify for extenuating circumstances.
Just want to be 100% sure since our current lease is up My 30th
I would like to explain our situation and hopefully you can provide some advice.
During my divorce, I filed for chapter 7, conventional mortgage included. Discharged 6/2011.foreclosure finally concluded 12/2013.
During my husbands divorce he filed for chapter 7, fha mortgage included. Discharged 8/2011.
Foreclosure started in 10/2010. His home was unoccupied as of 11/2010.
We found out his was removed from the title on 2/21/2011. This is the date Suntrust mortgage transferred the deed to HUD.
The sheriffs sale was 4/16/2012.
I called FHA and they stated the claim was paid 7/23/2012.
He has a pre-approval for a fha loan. (I can't be on the loan since my foreclosure was in 2013)
The underwritter says she can get a fha approval using the sheriffs sale date. She said we do not have to go by the date the claim was paid...
I asked her numerous times about this. I always thought we had to go by the date the claim was paid?
Could we apply through fannie mae? We're almost to the 4 year past bk discharge.
Could we use extenuating circumstances? Since my situation was due to a divorce, my household income decreased 70% since my exhusband moved out.
My husbands bk and foreclosure was also due to his divorce, he filed for divorce because his ex wife was physically abusive. He didn't have a drop in income but he did have high divorce attorney bills.
@patrick724 You would be correct that if the foreclosed mortgage was FHA, it goes by the date that the mortgage insurance claim was paid. That would move your "buy again" date to after 7/32/2015.
You are also correct that in 8/2015 - you would both be eligible for Conventional financing because your mortgage debt was included, and discharged through Chapter 7 bankruptcy.
I do not believe you have an extenuating circumstance claim here, and if you did, that would require you have a minimum 10% down payment if using conventional financing.
In all scenarios, if you can hold out for Conventional financing, you will be much better off because you will not have the permanent FHA mortgage insurance to contend with!
Hope this helps?
We had a chapter 7 bk that was discharged in 2010. We never reaffirmed the mortgage, but continued to pay timely for the last 5 years. We'd like to purchase another home and get out of this one (underwater 100,000). It shows included in BK on our credit. Is there any way to do this and then just let this home go back to the bank?
@kcccmom Unfortunately, this home will be considered when you purchase a new home. If you rent this home out, and buy a new home, you would be required to qualify for both the current, and new mortgage payments in order to purchase a new home.
My recommendation would be to try to do a short sale, or deed in lieu of foreclosure. Based on Fannie Mae guidelines as of August 2014, you would be eligible to buy 4 years from the discharge of a bankruptcy, with no additional waiting period for foreclosure, short sale, or deed in lieu of foreclosure.
It would mean that you would have to do something with the current home before buying again, and the waiting period may only be a month, instead of years.
Hope this helps?
I am in a similar position as Kcccmom. I had a chapter 7 that was discharged in 2010, and the mortgage was included. Since the house is $40,000 underwater, I wanrt to move out when our payment changes from interst only to a more traditional interest + principal arrangement. I don't understand what a deed-in-lieu of foreclosure is. I was thinking of strategic default but maybe there's a better way.
@Chapter8 a deed in lieu of foreclosure, a short sale, or a foreclosure are all pretty much the "same" in the eyes of a lender. Once the mortgage debt is discharged, the method of default does not matter.
The advantages of a deed in lieu of foreclosure, or a short sale, is that you have more control over the timelines. Many folks simply stop making payments, then it takes the lender years to foreclose, which postpones any chance of recovery you might have until the date your name is removed from title.
Hope this helps?
If I may check my understanding? I want to have my name removed from the deed before I buy another home. If I do a short sale, once the sale is complete, my name would be removed from the deed. In a deed in lieu of foreclosure, the bank would remove my name from the deed (in exchange for what? I find it hard to believe that I can just ask for this and they'd agree). If we walk away, then we will have trouble buying our new place, and possibly even renting, until my name clears the title.
@Chapter8 with a DIL, the assumption is that default is inevitable, and a DIL is a much less expensive route than the foreclosure process for the lender. Is your mortgage current now? or have you stopped making payments?
Oh, wait! No, it seems like I am in the same position as Mapis (earlier commenter). We are still living in the home, and making our payment each month. My 4 years for an FHA would start when my bk was discharged in 2014, correct? I don't need to worry further about deed in lieu, or short selling.
@Chapter8 The waiting period to buy after a BK using FHA is 2 years. As long as your mortgage is current, you would be required to qualify for both PITI payments for the current home, and the new home.
If you want to get rid of the home first, that may change the waiting periods, depending on how the default occurs, and what type of loan you are using to purchase a new home.
@Chapter8 Conventional, Fannie Mae guidelines were changed to state that if the mortgage debt was included in a BK, that the underwriter has the ability to use the BK waiting period, and not the subsequent default waiting period.
My experience is that underwriters are not comfortable if you file BK, discharge the debt, then continue to make the payments on time for years after the discharge.
The guideline is more designed to not punish folks that experience a one time financial hardship, and are unable to afford to continue to make payments, and the lender takes years to process the foreclosure.
I have been running into challenges getting an approval if you continue to live in the home, and make on time payments.
There's a high probability that if you default, or short sale, or DIL in 18 months, that you may have challenges finding a lender to interpret that as falling under the new fannie mae guidelines.
This stuff is not black and white - when you introduce "lender discretion", it will come down to how the lender interprets the situation.
So our best strategy might be to throw out extra money at the mortgage and just pay off the house. What do you think?