2017 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.

2017 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/deed transfer date. FHA treats short sale, deed in lieu and foreclosure as the same waiting periods.
  • 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.

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2017 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 the sale/deed transfer date.
  • 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.

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2017 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 the sale/deed transfer date.
  • 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.

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2017 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.
    • Credit must be re-established with a minimum 620 credit score.

Fannie Mae has reduced waiting periods in cases of extenuating circumstances

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP NOW!

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

2017 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.

Find the Right Lender. Find the Right Loan. CLICK HERE FOR HELP NOW!

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.

2,032 Comments
  1. Long story short, chapt 13 both me and wife discharged after 3 yrs of payments. Forclosure was in bk. Chpt 13 discharge was may 2016. How soon can we get a mortgage and what type? We want a small 250k loan or less if we can find something and have 20% saved to put down.

    comment by Lee
    on 3.24.17 at 6.13 pm
    1. Hi Lee, when did the foreclosure take place? What was the date?

      FHA financing is available 1 year from the discharge of a Chapter 13, but will require a 3 year wait from the foreclosure. If the foreclosure took place after the filing of the bankruptcy, you could buy using Conventional financing in 2 years from the discharge date, and ignore the foreclosure date.

      If you have 20% down, and the foreclosure was more than 3 years ago, I would look at a FHA loan in May, and then refinance into Conventional to remove the mortgage insurance in May of next year.

      If you would like an introduction to a lender that is familiar with these guidelines, shoot me an email to [email protected] and I can make that connection.

      Hope this helps?

      comment by Scott Schang
      on 3.24.17 at 6.31 pm
      1. Foreclosure will be 3 yrs gone jan 2018
        bk discharge will be 2yrs gone may 2018

        comment by lee
        on 3.25.17 at 12.15 pm
      2. I sent you an email with my location and phone number

        comment by lee
        on 3.25.17 at 12.19 pm
        1. Hi Lee, I responded to your email as well. I have a great introduction for you. I would definitely run the numbers on a portfolio loan option if you want to buy now. It would be a short 9 to 12 month investment to own now, and refinance into a traditional loan with a lower payment once you’ve reached your waiting periods.

          comment by Scott Schang
          on 3.25.17 at 12.41 pm
  2. Hi Scott,
    I am trying to find a blog for people purchasing after foreclosure and the real process and circumstances that surround their rebound home purchase. I cannot find anything. Just info on what you need to do to qualify. In short, lost our house to foreclosure due to bank not modifying after 12 months. Credit score was 450 after foreclosure. Fast forward 4 years to today. Current credit scores 620-630. Monthly income 10,000+ per month. Been with same employers for 18 and 12 years. Annual income with hubby seasonal unemployment is $118,000. Current debt is $2,000 monthly in cc, camper and motorcycle payment. No lates in 4 years. Looking to purchase home we have rented for he past 4 years for $150,000. Would like to get an FHA loan with 3.5 % dp. Just noticed medical collections for 4000 on our credit report and a 581.00 utility bill from 4 years ago that we had no idea was on our report. Will we qualify for and FHA loan? Everyone just wants to run our credit without a general idea of if it is even worth it. Do not want to dinge our credit with inquiries if we are a long shot! Any opinion you have or advice would be awesome. We have to purchase by June or the landlords are putting it on the market. Home should appraisal out around 165-171,000.

    comment by Tammy
    on 3.23.17 at 5.48 pm
    1. Hi Tammy,

      Yes, you would be eligible for FHA financing in 3 years from the foreclosure. It sounds like you would be eligible based on everything you’ve stated here.

      What State are you buyin in? If you shoot me an email to [email protected], I can introduce you to a lender that has experience with these guidelines and can actually help.

      Good job not letting people just run your credit without discussing your situation and helping you understand the path. We created this website to fight against those types of loan officers.

      I fixed all your cell phone typos – no problem 🙂

      comment by Scott Schang
      on 3.23.17 at 8.37 pm
      1. Thank you for your quick response! I am currently working with a lender who has taken the time to really listen to me and my circumstances! We are currently going through the pre-approval process and should hear something by tomorrow! This has been a very stressful few years and I appreciate people like you that are out here helping others to understand all the hoops and requirements! I think after all is said and done I will start a blog to journal my process from the foreclosure to the rebound home purchase! It has been quite the roller coaster. Keep doing what your doing! You help restore faith in the lending community! That they aren’t all bad guys!

        comment by Tammy
        on 3.23.17 at 8.47 pm
        1. That’s great news Tammy! There are a lot of really great lenders out there. Unfortunately, they are a little harder to find.

          They don’t have the same money that the big box lenders do to make loans sound “push button easy”

          Feel free to check back with us if your lender has challenges!

          comment by Scott Schang
          on 3.23.17 at 8.53 pm
  3. Hi Jim, Filed bankruptcy in 2012. Did not include our home in the filing. We did not refi our home but have continued to make payments on time since original inception of our loan. Signed a deed in lieu in NC for a land loan signature loan. Looking to buy a home in NC now, after selling our home here. Credit is good 700. Looking to put down about 40,000 on an 80,000- 90,000 home in Clyde NC. Thanks

    comment by Debbie
    on 3.23.17 at 11.46 am
    1. Hi Debbie,

      If the land loan was included in the bankruptcy, and as long as your current home is not a short sale, deed in lieu or foreclosure, you would be eligible for conventional financing now. The waiting period is 4 years from the discharge of the bankruptcy, and you can ignore the deed in lieu on the land loan.

      Hope this helps?

      comment by Scott Schang
      on 3.23.17 at 1.44 pm
  4. Are there any construction loans or construction to perm loans available 1 year after chapter 13 discharge?

    comment by Rusty Jones
    on 3.22.17 at 5.31 am
    1. Hi Rusty,

      Yes, you can use a FHA construction loan 1 year from the discharge of a Chapter 13. If there were any foreclosures, short sales or a deed in lieu that occurred during or after the BK, that may affect your timeline.

      The challenge becomes finding a lender that specializes in FHA construction loans. What State are you buying in? If you shoot me an email with your location to [email protected], I will see if I can introduce you to someone that I know has experience with this.

      comment by Scott Schang
      on 3.22.17 at 8.39 am
  5. How can I find out the date HUD paid the mortgage company? The court case was closed may of 2014. But the public record does not show a transfer of the property till wells Fargo transfer to HUD. I received no paper work on this and can not receive and answer from the attorney who handled the case.

    comment by Laura
    on 3.17.17 at 7.35 am
    1. comment by Scott Schang
      on 3.17.17 at 9.03 am
  6. Thanks for all the information you provide to the many people that are confused about mortgages

    comment by Ralph SAT.
    on 3.15.17 at 12.05 am
    1. Thanks for the kind words, Ralph.

      comment by Scott Schang
      on 3.15.17 at 10.42 am
  7. What happens if after 4 years post bankruptcy and 2 years bankruptcy discharge the previous FHA loan covered under the bankruptcy has not foreclosed and/ transferred title? Credit is above 700 but hitting in CAIVERS because foreclosure never happened even though no debt owed due to bankruptcy.

    comment by Benjamin
    on 3.13.17 at 8.30 pm
    1. Hi Benjamin,

      It sounds like the previous loan was FHA? There is more detail in your question that what you’ve addressed here, so I have a few questions to clarify your situation. You said 4 years post bankruptcy, and 2 years bankruptcy discharge? do you mean 4 years since filing BK, then it was discharged 2 years later?

      Also, do you know if the foreclosure ever took place? It is not uncommon for the waiting period to be delayed until after the mortgage insurance claim is paid by HUD after the foreclosure, however, that only becomes an issue if you are trying to buy a new home using an FHA mortgage.

      I am going to go out on a limb and assume that your bankruptcy was discharged 4 years ago, and maybe the foreclosure was 2 years? If that’s the case, you can buy with as little as 3% to 5% down payment using conventional financing in 4 years from the discharge of the BK, and ignore the foreclosure date.

      FHA is going to require a 3 year wait from the date that the mortgage insurance claim was paid by HUD.

      If you would like, shoot me an email to [email protected] and we can hash out the details of your situation and get your timelines dialed in. Sounds to me like you’re close to being eligible to buy again if you use a Conventional loan.

      Hope this helps?

      comment by Scott Schang
      on 3.14.17 at 10.23 am
  8. Hi! So we were just discharged from chapter 13. We have good credit. Can we get a loan for a home in 4 months? Possibly a portfolio loan?

    comment by Sarah
    on 3.13.17 at 2.10 pm
    1. Hi Sarah,

      With a minimum 20% down payment, it is possible to use a portfolio loan to buy now. You would be eligible for FHA using manual underwriting in 1 year from the discharge, and conventional financing in 2 years from the discharge.

      Was there a mortgage included in the BK by any chance? If so, that could affect your waiting periods with FHA financing.

      After 20% down, if you can still qualify with the higher interest rates, it could make sense to take the portfolio loan, then refinance it as soon as you are able to.

      If you’re interested in exploring this option, shoot me an email to [email protected], let me know what State you’re buying in, and I can try to introduce you to someone I know that has experience with these programs.

      comment by Scott Schang
      on 3.13.17 at 4.23 pm
  9. I just sent you an email. Please reply. Thank you.

    comment by Elaine
    on 3.12.17 at 11.39 pm
    1. Hi Elaine,

      I received your email and you are definitely eligible for conventional financing now. FHA financing is available to you on the timelines that you mentioned, 3 years from the last housing event.

      I introduced you to one of the most experienced loan officers I know. He can definitely help.

      comment by Scott Schang
      on 3.13.17 at 10.13 am
  10. Hi we are thinking of doing a short sale because our payments just went up and now we can’t afford it. We tried to modify and they took off 30$ from a $500 increase. It doesn’t help. I have heard so many different things on how long it will take to buy again. Did it recently change to 4 years? I am in UT. Thanks!

    comment by De
    on 3.12.17 at 9.18 pm
    1. Hi De,

      If the home was included in a bankruptcy, the waiting period could potentially start from the discharge of the bankruptcy. If there was no bankruptcy, then the waiting period before being eligible to buy using traditional financing is going to be different, depending on what type of financing you are applying for.

      For conventional financing, you are correct, the waiting period is 4 years from the date that your name is removed from title to the home.

      For FHA financing, you would be eligible again in 3 years from the short sale, unless the current loan is an FHA insured loan. If the current mortgage is FHA insured, then the 3 year waiting period begins from the day that the mortgage insurance claim is paid by HUD.

      Hope this helps?

      comment by Scott Schang
      on 3.13.17 at 10.26 am
  11. Hi – I had a short sale in august 2014, after my divorce. My credit has been perfect since and hovers around 680. My question is this; I want to build a custom home, close and move in august of 2018. The house will take 5-6 months to build. Is it possible to get qualified for a loan 5-6 months ahead of time and close right at the 4 year wait time, or like the FHA and VA loans, does the qualifying have to happen after the wait time.

    comment by Jim
    on 3.12.17 at 5.08 pm
    1. Hi Jim,

      Was the mortgage included in a bankruptcy by any chance? If not, yes, it is possible to get “credit qualified” for a conventional loan. You would not be able to receive an actual full underwriting approval, but you could certainly get everything lined up.

      The challenge is that the short sale is going to show up on the credit report, and Fannie Mae’s automated underwriting engine, DU (Desktop Underwriter) will pick up the date, and prevent you from getting an automated underwriting approval.

      That does not mean that you could not get qualified based on income, credit and employment.

      Hope this helps?

      comment by Scott Schang
      on 3.13.17 at 10.29 am
  12. Hi Scott
    I had a bankruptcy in January ,2010 and my condo was included in the chapter 7 and deed in lieu was May , 2013.
    My husband bought a house in a September 2010 and added me to the deed.
    Is it possible for me to buy a second home for retirement?

    comment by Casey
    on 3.12.17 at 3.13 pm
    1. Hi Casey,

      Yes, you would be eligible now to buy a second home using Conventional financing. With a conventional loan, you are eligible to buy in 4 years from the discharge of the BK, as long as the mortgage was included in the discharge. You can ignore the deed in lieu date.

      Hope this helps?

      comment by Scott Schang
      on 3.12.17 at 3.39 pm
  13. Hi Scott,
    Just to be sure, our bankruptcy was recently discharged and we had no mortgage included. Mine was medical bankruptcy only, because we are married, my husband and I were both being garnished simultaneously by opposing collection agencies and we couldn’t afford it anymore. Anyway, we have to wait 2 years to apply for a home loan now? Is that just for FHA or is that for conventional as well? I feel like most of the information I have found is aimed at bankruptcy including a mortgage so I just want to be sure. Thanks!

    comment by Heather Snell
    on 3.11.17 at 7.59 pm
    1. Hi Heather,

      FHA requires a 2 year wait after the discharge of a bankruptcy, USDA is 3 years, and Conventional is 4 years.

      Hope this helps?

      comment by Scott Schang
      on 3.11.17 at 8.13 pm
  14. Hi Scott,
    My husband and I filed for Chapter 7 bankruptcy in 3/2011. In the next few months the court asked us to switch to a chapter 13 plan due to our income being slightly above the line for qualifying for chapter 7. We have only very recently received our discharge and are looking to purchase a new home. We have good credit scores (low 700’s), 35k in our 401k, 60k in cash, and own the small home we live in (worth around 80k). Our combined income would be around 95k per year. We have $0 debt. Would we qualify for a portfolio loan? What is your recommendation for a family in our situation?

    Thanks!

    comment by Elsie
    on 3.11.17 at 2.50 pm
    1. Hi Elsie,

      A portfolio loan is going to require a minimum 20% down payment, and the rates and fees are going to be higher than a traditional mortgage.

      That said, you just have to do the math to determine whether or not this is a viable option for you. The key factor in making this decision, is how quickly you can get out of it.

      Using FHA financing, you would be eligible to buy in 1 year from the discharge of a Chapter 13. Conventional financing (to avoid mortgage insurance) is a 2 year wait from the discharge.

      You could literally refinance into a FHA loan as soon as possible, then into a Conventional a year later to remove the mortgage insurance.

      If you need help making the decision of whether or not this is a good strategy for you, shoot me an email to [email protected], with the State you’re buying in, and I can introduce you to a lender with experience with these programs and guidelines that I trust.

      Hope this helps?

      comment by Scott Schang
      on 3.11.17 at 8.17 pm
  15. Hi! Scott, My husband and I tried to buy a house last yr. at the Lake, he has retired. His credit is good now, after a bankruptcy in 2012; we moved out into a rental house, have been leasing for 4 yrs. now. with no late pymts. we were ready to move and were preapproved, 2 weeks before we were to move. than they called us and said no , they cant approve it thru FHA or VA or Conv. on account of the Sheriff sale on our house was sold a yr. later after our bankruptcy. WE did include it in the bankruptcy. They told us they had to go by the date of the sale of the property, on the sale. Which would be Jan 20, 2015; we were very disappointed, and they told us we had to wait 2 yrs. from that date. So now we have waited. We started looking again at house’s. Now the mtg. company is telling us we have to wait another yr. on acct. of Fha is 3yrs.now. before we can buy. and Conventionl 5 yrs. Is this true?

    comment by DIANE JAMES
    on 3.8.17 at 10.16 pm
    1. Hi Diane,

      Oh boy, you’re working with someone that really has no idea on what the guidelines are. FHA has always been 3 years from the date your name is removed from title, regardless of whether or not the home was included in bankruptcy.

      Conventional is 7 years, UNLESS the mortgage was discharged through bankruptcy. If the mortgage was included, and discharged, you could be eligible in 4 years from the discharge of the bankruptcy, and ignore the foreclosure date.

      What State are you trying to buy in? Shoot me an email to [email protected] and I will introduce you to someone that has experience with these guidelines and can help.

      comment by Scott Schang
      on 3.9.17 at 10.59 am
  16. Hi Scott, We filed CH 13 in April 2009, it was discharged in March 2014. Our home at the time was included in the CH 13. It sold in Oct 2010. We are ready to purchase again, but are being told that we have to wait 3 years from the discharge before we can apply for an FHA mortgage and 7 years from the foreclosure to apply for Conventional. In reading your comments it appears we actually have to wait 4 years from the discharge to apply. Can you confirm?

    comment by Kay
    on 3.8.17 at 11.46 am
    1. Hi Kay, all 3 of those timelines that you are being told are inaccurate. FHA requires a 1 year wait from the discharge of a Chapter 13 BK, and 3 years from a short sale, foreclosure, or deed in lieu. You are eligible for FHA financing now.

      Conventional financing allows you to buy in 2 years from the discharge of a Chapter 13, and ignore any foreclosure, short sale or deed in lieu as long as the mortgage was included, and discharged in the bankruptcy. You should be eligible for FHA financing now as well.

      What State are you in? Send me an email to [email protected] and I can introduce you to a lender that has experience with these guidelines and can help.

      comment by Scott Schang
      on 3.8.17 at 12.05 pm
  17. Scott,
    Bankruptcy dismissed Feb 2015, house foreclosed Sept 2015…. does dismissed and discharge mean the same thing and when can I buy another house.

    comment by Linda
    on 3.8.17 at 7.09 am
    1. Hi Linda,

      Dismissed and discharged are not the same things. If the bankruptcy was dismissed, then the mortgage was not included, or discharged. You would be eligible for FHA financing in 3 years from the foreclosure, and Conventional financing in 7 years from the foreclosure.

      comment by Scott Schang
      on 3.8.17 at 10.24 am
  18. Hello Scott, are there any mortgage lenders that will approve a loan 1 year after having chapter 7 bankruptcy discharged in NY?

    comment by Mindy
    on 3.7.17 at 5.50 pm
    1. Hi Mindy,

      There are lenders that will allow this, but it is not “traditional” financing. What that really means is that the interest rates and closing costs are going to be a little higher, and you would need a 20% down payment.

      If you think that you’re interested in exploring that option, I do know a lender that has experience with those types of programs that can help answer any questions you have about it.

      Was there a home included in that bankruptcy? If not, you would be eligible for FHA financing in 2 years from the discharge of a Chapter 7. That means that if you could come up with the down payment, and if you can afford the payments, you would only need to keep that portfolio loan for about a year or less until you could refinance into a FHA loan.

      Hope this helps?

      comment by Scott Schang
      on 3.8.17 at 10.22 am
  19. Hi Scott, I am in the market to buy a house after a short sale. It will be 2 years in as of October 12, 2015 that I sold me home. Are there any programs that I can take advantage of to but a house with a 690 credit score?

    comment by Edwin
    on 3.7.17 at 11.35 am
    1. Hi Edwin,

      Yes, there are absolutely programs that will allow this. Is there any chance that there was a bankruptcy prior to the short sale?

      If not, you’re looking at a minimum 20% down payment. Your credit scores are fine. You can expect higher rates and fees on these programs, so you just have to do the math and see if it makes sense. In my experience, if you have the means, it almost always makes sense to consider an option like this.

      If you’re interested in exploring these options further, feel free to shoot me an email to [email protected] and we can continue to discuss your options.

      Hope this helps?

      comment by Scott Schang
      on 3.7.17 at 11.43 am
  20. Hi Scott,
    Some high level details about my situation. Purchased our current home almost 6 years to date. Had a short sale on the previous home almost 5 years to date as well. Looking for new (larger) home that is a new build. Had problems the past years of refinancing but was finally able to refi last year. Living in NorCal in a housing market that is medium-hot right now so we could turn a good size profit on the home sale that could go towards the down payment. Problem is, who would lend on my case and look past the 7 year requirement? Would be nice to get a Jumbo loan.

    comment by Joseph N
    on 3.7.17 at 10.49 am
    1. Hi Joseph,

      I have an investor here in California that will allow short sale seasoning of 4 years with 20% and high credit scores. This investor is an “A-paper” lender with really good rates and terms.

      Another option may be an 80/10/10 with a conventional first mortgage up to the conforming loan limit of $636,150.

      There are always portfolio lenders that will allow the shorter seasoning, but carry higher rates.

      If you would like to further explore any of these options, feel free to email me directly at [email protected]

      Hope this helps?

      comment by Scott Schang
      on 3.7.17 at 11.01 am
  21. Hi Scott,
    I was chapter 7 discharged in feb.2016 and the house was included. the house sold may of 2016 but nowhere on my credit report does it show a foreclosure. my question is is we are living in my wifes brothers house and this is the house we want to buy. he just wants whats owed on the house so we were going to do a gift of equity for the 20 percent down but my wifes debt to income is to high. is there anyway I can qualify for the mortgage?

    comment by Jeff M.
    on 3.6.17 at 1.12 pm
    1. Hi Jeff,

      You’ve got a couple of challenges here. Traditional, conventional financing is going to require a 4 year wait from the bankruptcy. The foreclosure does not require a separate waiting period, but is a matter of public record, and is not something you can avoid. FHA financing is going to be a 3 year wait from the foreclosure date, which puts you another couple of years.

      There are two other options that I can see. The first, and easiest, would be for your brother to do seller financing. This essentially means that you make loan payments to your brother every month until you qualify for traditional financing.

      The last option is that you use a portfolio loan. This option allows for a higher debt to income ratio than traditional financing (50% as opposed to 45%). A portfolio loan is going to have a higher interest rate, and higher closing costs, but would be a small price to pay to get a deal on this home.

      If you would like to explore the portfolio loan option, shoot me an email to [email protected] and I can introduce you to a lender that can help. Please include what State you’re buying in?

      Hope this helps?

      comment by Scott Schang
      on 3.6.17 at 1.22 pm
  22. Hi Scott,

    Do you know of any lenders that will finance 2years after short sale? Or is the waiting period a hard 3years? Long story short we had to get FHA involved in order to the process started with the mortgage company, and thought we were doing the right thing by doing a short sale, but seems we were wrong. I can email you the details if that will help. We are in NC

    comment by Tara Kinman
    on 3.3.17 at 8.37 am
    1. Hi Tara,

      Yes, email me the details to [email protected]. There are investors that will do this 2 years from short sale, but they will typically require better credit scores and a higher down payment. These are called Portfolio loans, which basically just means that they lend their own money, and do not sell to Fannie Mae.

      Was the mortgage included in a bankruptcy by any chance? That can also shorten the waiting period in some cases.

      comment by Scott Schang
      on 3.3.17 at 9.25 am
  23. Hi Scott!
    I just sent you an email. I looking for information on qualifying for a hardship second chance after short sale. Thanks!

    comment by Valerie
    on 2.27.17 at 8.25 pm
    1. comment by Scott Schang
      on 2.27.17 at 8.45 pm
  24. Hi
    We had DIL 2012 in PA after putting improvements in home. Parents sick had to return to NJ to care for them. Couldn’t sell home close to our appraised value of 12 year old newly built home. Had to leave, called and told mortgage co we were leaving, sent keys and left, filing DIL.
    Had the mortgage forgiveness act, so we had the tax impact and credit impact but our best option at time.

    We are renting for passed 5 years and want to buy home in Florida. Income is supportive easily, paid credit cards and taxes and have credit score around 780.

    Anything we should be concerned with please? Thank you!!

    comment by Leslie DiCarlo
    on 2.26.17 at 5.40 am
    1. Typo…credit score 740

      comment by Leslie DiCarlo
      on 2.26.17 at 5.43 am
      1. Hi Leslie,

        You should have no issues with the DIL as long as title transferred out of your name in 2012. It is not uncommon for there to be a delay from when you complete the paperwork and when the lender actually transfers the home out of your name.

        The only other challenge you may have is finding a lender that has experience with these guidelines. I have lender friends in Florida with experience that can help. If you would like an introduction, shoot me an email to [email protected] and I can get you pointed in the right direction.

        Hope this helps?

        comment by Scott Schang
        on 2.26.17 at 8.31 am
  25. Hi Scott,
    Thanks for putting these guidelines together. It’s very helpful. You sound like a lawyer too, very knowledgeable!
    I had a short sale 4 years ago, and is in the process of closing a jumbo loan that has been going smoothly with this loan officer who is being introduced to me from a long time real estate agent friend. I just realized from the info here that it will normally take 7 years to get a jumbo after short sale. Even this loan agent did tell me that not a lot of bank will do it. What my question is: since I am getting a new build, the builder did offer me a loan through a credit union, and they are willing to lock my rate at what this credit union is offering on the site, which is really attractive, but they haven’t gone through final underwriting yet, but they did assure me that everything looks great and keep pushing me to lock the rate with them. Would the builder’s loan agent give me the rate they are locking for me? Is it really true that credit union is very strict on approving a jumbo mortgage esp. with my short sale record?Thank you so much for your information in advance! Appreciate your time!

    comment by Cam
    on 2.24.17 at 10.16 pm
    1. Hi Cam,

      I think “sounding like a lawyer” is a compliment? So I”ll take it! Thank you 🙂 I am not a lawyer, and I do not offer legal advice, but I do try to share my experience as a mortgage lender so that others can find their way through the fog of misinformation and inexperience that plagues my industry. I appreciate the kind words!

      Yours is a very, very good question! Credit unions lend their own money in most cases. This means that they make their own rules. I am in California, and I have banks that allow exceptions for short sales as long as you have compensating factors like reserves, big down payment (20%), and good credit scores. As long as you are upfront and the loan officer knows that you had a short sale, you may very well be eligible for the loan that they are offering.

      The biggest challenge is knowing whether or not the loan officer knows what they are talking about or not. If the loan officer is not familiar with the guidelines, or does not previously have experience with this specific scenario, it could very well create a challenge once it gets on the underwriters desk.

      It’s going to be up to you to determine whether they are telling you what they think you want to hear because they want a pay day, of if they really know what they are talking about and have experience with this type of a scenario. I can tell you that it is definitely possible. A credit union is not necessarily strict, they are more likely to simply have an appetite for certain types of risk based scenarios above others.

      Hope this helps?

      comment by Scott Schang
      on 2.25.17 at 7.57 am
      1. Hi Scott,
        Thanks so much for your time and your lightning reply. I really appreciate you taking the time to answer all my questions. It’s definitely very helpful. Thank you so much again!

        comment by Cam
        on 2.25.17 at 11.53 pm
        1. My pleasure Cam!

          comment by Scott Schang
          on 2.26.17 at 8.28 am
  26. i fell down a set of stairs on 2-09-2015 i was out of work for 10 months due to the injury. my income dropped from 240.000.00 a year to 26,000.00 they foreclosed on my home and we moved out on Dec 21 2015. Is there some type of consideration for this type of thing or am i again screwed? by the way i did have personal disability insurance to cover this type of thing but in Az. if you are injured on the job your personal disability insurance is not valid if your injury happened at work and the max paid by Az workmans comp is 26300 per year.

    comment by Rick
    on 2.22.17 at 7.37 pm
    1. Hi Rick,

      Fannie Mae may consider this as an extenuating circumstance. Was there a bankruptcy as well? If there was no bankruptcy, Fannie mae may shorten the 7 year waiting period down to 3 years by documenting the loss of income.

      FHA financing is not so lenient and limits extenuating circumstances to death or permanent disability of a primary wage earner. If your injury makes you eligible for permanent disability benefits, the FHA waiting could be reduced from 3 to 1 year.

      Your final option is a portfolio loan. Yes, the rates and fees are higher than traditional financing, but it can get you into a home, start earning equity, paying down principal instead of paying rent, and take advantage of the tax benefits of homeownership. This would be a temporary solution only until you could refinance into a better program.

      If you think any of these options might apply to you, shoot me an email to [email protected], and I can see if I can introduce you to a lender in your State that has experience with this type of scenario.

      Hope this helps?

      comment by Scott Schang
      on 2.22.17 at 9.01 pm
  27. Hi Scott maybe you can help me out the bank sold us back up on house on a short sale we have a lot of satisfaction from the mortgage company stating the mortgage was settled and fall but it seems we cannot get a mortgage do you think you can help us out thank you

    comment by Peter Kuhl
    on 2.21.17 at 12.02 pm
  28. Hi kind of a different situation the bank sold me back my own house on a short sale I’m just wondering if I’m eligible for another mortgage now how can I go about about this I have a letter of satisfaction from the mortgage company saying that the loan was paid in full can you help me out with this thank you

    comment by Peter Kuhl
    on 2.21.17 at 11.53 am
  29. My bankruptcy was discharged in March of 2012. The bank wouldn’t move forward with the foreclosure, and in 2015 I was approached by a realtor who wanted to do a short sale. I told the realtor the bank refused all previous short sale offers but he was confident he could get one to go through. The bank approved the short sale and it sold in Dec of 2015. I just attempted to get a loan after reading I only had to wait 4 years from the BK. Apparently the underwriter rejected the loan because I signed a Deed in Lieu, in Dec 2015? Which I only did because the bank wouldn’t foreclose and I was unaware of the updated wait times. So now my 3 year wait starts from Dec 2015, instead of 4 years from March 2012? Please let me know if I have any other options. Thanks!

    comment by Stephen
    on 2.21.17 at 11.51 am
    1. comment by Scott Schang
      on 2.21.17 at 1.28 pm
  30. Hi Scott,

    We had a short sale on our home in CT due to no employment and we had to move to Texas for work. It was a USDA direct loan so they came after us for the rest of the $140,000 that was left on the loan. At that point we filed a chapter 7 bankruptcy and included the home.

    The home and bankruptcy was discharged 9/2015 and the home was short sale sold on 10/2015.

    We already purchased a new house in Texas before the short sale of the home because we were renting it out at the time to help pay for the mortgage. I assumed the tennets loved it and wanted to stay but after some winter electric heat bills they wanted out ealier then expected. After renters moved out we again had a hard time paying that mortgage. So I tried selling it as a short sale and I got people right away.

    So my question is the new house we bought in Texas (I really dont enjoy the area and would like to move the bay area of Texas) I want to sell and purchase in another area. How long to I have to wait to buy again. Our credit scores are in the low 600 s due to the bankruptcy but our credit payment history has been 100 percent on time for 10 years.

    The bankruptcy and the short sale were all due to no employment in CT so we reloctated 1800 miles for work.

    comment by Jenny
    on 2.19.17 at 11.30 pm
    1. Hi Jenny,

      For traditional financing like Conventional, FHA or USDA, the waiting period is a minimum 3 years from the short sale for FHA and USDA, 4 years from the Bankruptcy for Conventional.

      If you have a minimum 20% down payment after the sale of your current home, you could consider a portfolio loan. These loans have higher rates and fees, but will accomplish the goal of homeownership until you can refinance into a loan with better terms.

      Hope this helps?

      If you are interested in this option, shoot me an email to [email protected] and I can introduce you to someone I know and trust that has experience with these guidelines.

      comment by Scott Schang
      on 2.20.17 at 7.36 am
  31. We filed Chapter 7 in 2010 and included our home. However we did retain the residence for a little while by keeping current on the payments but never reaffirmed the loan. We finally stopped paying and it was foreclosed on in 2015. We are currently trying to buy a house with the Home Ready 3% down conventional, but the underwriter has said since we retained the residence and it was not surrendered at the time of bankruptcy, then we have to go by the actually foreclosure date and not the bankruptcy discharge. Is there any advice you could give to get around this? thank you

    comment by Tia Erickson
    on 2.14.17 at 9.26 pm
    1. Hi Tia,

      That underwriter is imposing their own opinion on the interpretation of the guideline, or following an overlay opinion by their employer. I know many lenders that follow the guidelines and can do this loan. Please shoot me an email to [email protected], let me know what State you’re buying in, and I will introduce you to a lender that can help.

      You are eligible for HomeReady now.

      comment by Scott Schang
      on 2.15.17 at 8.08 am
  32. My bankruptcy was discharged in Oct of 2010, however the bank did not foreclose on the house until September of 2016. Shouldn’t the date of 2010 be the one that holding period goes by? If not, then how come I get penalized again beings it took the bank so long to foreclose on the home after it was discharged ?

    comment by Megan
    on 2.14.17 at 12.23 pm
    1. Hi Megan,

      Conventional underwriting guidelines agree with you 100%, and changed their guidelines in August 2014 to allow you to use the bankruptcy waiting period of 4 years from the discharge, as long as the mortgage was discharged through the bankruptcy.

      Unfortunately, FHA underwriting guidelines do not follow these same waiting periods, and will require a 3 year waiting period from the date of the foreclosure. It is not uncommon for lenders to only know, and quote this waiting period.

      Not all lender know, or understand these guidelines. If you need help, shoot me an email to [email protected] with your location, and I can introduce you to a lender that is experienced with these guidelines.

      Hope this helps?

      comment by Scott Schang
      on 2.14.17 at 3.19 pm
  33. my chapter 7 bankruptcy included my house and discharged May of 2012. It took the bank a total of 4 years to actually foreclose which occurred December 2016. Am I eligible to rebuy after May since 2017 since the chapter 7 discharged in May 2014

    comment by A. Billops
    on 2.10.17 at 4.31 pm
    1. Hi Anitra,

      I also answered your email, but I’ll put it here as well so that others may benefit if they are in a similar situation. I believe you are saying that the bankruptcy is discharged in 2014, right?

      The waiting periods are different depending on what type of financing you are applying for. FHA financing is going to look at the bankruptcy and the foreclosure as two separate events with two separate waiting periods. The soonest you would be able to buy using FHA financing would be 3 years from the foreclosure.

      The soonest you could buy would be using Conventional financing, 4 years from the discharge of the bankruptcy. Conventional financing will allow you to ignore the foreclosure date.

      Hope this helps?

      comment by Scott Schang
      on 2.10.17 at 4.55 pm
  34. Hi Scott! Hoping you can direct me a bit further although I have found your website quite helpful and informative itself, thank you! My husband and I filed chapter 7 and rolled our property into the bankruptcy. It was discharged in June 2015. I understand the standard wait period for a new loan through fha is 2yrs from date of discharge. This seemed to be our best hope in repurchasing till now… Could you kindly provide me with more info on subprime loan or stated income loan opportunities specific to my circumstances? I would be so very grateful!

    comment by Janine casdia
    on 2.10.17 at 7.39 am
    1. Hi Janine,

      You are correct that the waiting period after bankruptcy is 2 years, but there is a separate waiting period depending on what happens to the home that you included in the BK.

      Stated income and portfolio loans are available with a very large downpayment, higher interest rates, and higher fees.

      Shoot me an email to [email protected] with the details of your situation, and I’ll do my best to match you with a lender in your area that has experience with these types of solutions.

      Hope this helps?

      comment by Scott Schang
      on 2.10.17 at 8.21 am
  35. My husband and I did a short sale in March of 2010 (first payment missed in January of 2010; sale recorded in March). We had an 80/20 loan with Wells Fargo. Our attorney had worked out that both 1st and 2nd would be marked ‘As Agreed’ on the credit report, but when we got the closing docs a few hours before closing, the 2nd was listed as a deficiency. Our attorney said to go ahead and close and deal with it later. Afterward, WF wouldn’t budge on the second, so as of 2016 it was still listed as a deficiency on our credit report. Since it’s now been 7 years will it still prevent us from getting a mortgage if it hasn’t fallen off the credit report like it should? Any advice on how to handle this? Thanks very much!

    comment by Cassandra Aristide
    on 2.9.17 at 1.49 pm
    1. Hi Cassandra,

      How that mortgage reported 7 years ago will not impact your ability to buy now. There is a “waiting period” depending on what type of financing you are using to buy the home after a short sale.

      For Conventional financing, the waiting period is 4 years from the short sale date. For FHA or USDA financing, it’s a 3 year wait before you are eligible.

      You are well past both of these waiting periods.

      If you would like an introduction to a lender that understands these guidelines, you can send me an email to [email protected], and I’ll see if I can introduce you to someone in your State.

      Hope this helps?

      comment by Scott Schang
      on 2.9.17 at 2.12 pm
  36. Hi Scott. I’m in nj I had to file bankruptcy 4years ago and gave up rights to an investment property. I was single not married. Only my debt. Now my husband and I are married and want to buy a house he wants neon mortgage with him but that bank still has not sold my foreclosure that I am not responsible for through my chapter 7. Does the new rule apply to me. Can I apply for a conventional loan 4 years after I gave up monetary responsibility to that home even though they haven’t sold it? I hope so.

    Thanks

    comment by LA
    on 2.7.17 at 4.55 am
    1. Hi Lindsey,

      This is a common problem that I affectionately call a “Zombie Foreclosure”. Unfortunately, while the bankruptcy does relieve you of any financial accountability in the event of a default on the mortgage, the lien survives a bankruptcy, and you are still the owner of the property until that your name is removed from title by selling it (short sale, or other), a deed in lieu of foreclosure, or foreclosure action by the lender due to the mortgage being in default. There is no law that requires a lender to foreclose, and I’ve seen this hundreds, if not thousands of times where years have passed without the bank taking the home back.

      Sorry for the long explanation. The simple answer to your question is no, you would not be eligible under the conventional guideline right now. The longer answer is that you would be eligible as soon as you can get your name removed from title. You can either list the home for sale (or short sale) with a local Realtor, or contact the bank and negotiate a deed in lieu. The day after the new grant deed is recorded, you would be eligible under conventional guidelines.

      A last thought here. If your income is not required to qualify for the new home, you could be on title, but not on the loan.

      Hope this helps?

      comment by Scott Schang
      on 2.7.17 at 8.04 am
  37. I had a foreclosure, had move by 6 jan. 2016 but, PMI paid original lender well before that date, CAIVRS says name will be removed in June or July 2017. I guess my name was taken off title or something, at the earlier date, right?

    comment by James E. & Debbie L. Jones
    on 2.6.17 at 4.27 pm
    1. Hi James and Debbie,

      Normally, the PMI claim is paid about 3 to 6 weeks after the foreclosure takes place. If you are trying to apply for FHA financing, the waiting period is 3 years from the date that the claim was paid. If you want to shoot me the address of the home to [email protected], I can look up public records and see if I can find the foreclosure date.

      By the way, using conventional financing, the waiting period is based off the foreclosure date, not the date the insurance claim is paid. And if the mortgage was included in a bankruptcy, you can use the bankruptcy date, and ignore any foreclosure that occurred after the discharge.

      comment by Scott Schang
      on 2.6.17 at 4.41 pm
      1. Hey Scott, thanks for taking the time, Home’s address was 324 SW Sonoma Way, Ft. White, Fl. 32038, also home was included in chapter 7 bankruptcy that discharged in july 2014 I believe. I have been told by a lender that I have a CAIVRS listing that will mature in 2017, so is the bankruptcy discharge date the one that I have to worry about and may also be the reason that PMI paid before subsequent foreclosure? Scott, thanks again for your help. James & Debbie

        comment by James E. & Debbie L. Jones
        on 2.7.17 at 6.00 pm
        1. Hi James and Debbie,

          The Trustees Deed Upon Sale (foreclosure date) was 1/22/2016. Anything that has to do with CAIVRS would mean using a FHA or VA mortgage. FHA guidelines would not allow you to use FHA financing until 3 years from the date that the Mortgage Insurance claim is paid by HUD.

          If you only use the foreclosure date, you would not be eligible for FHA financing until January, 2019. The quicker path to traditional financing is using a Conventional, which will allow you to ignore the foreclosure date, and buy again in 4 years from the discharge of the Chapter 7, as long as the mortgage was discharged through the BK.

          This timeline would put you at July 2018.

          Unfortunately, your lender is wrong. They are looking at the fact that your mortgage stopped reporting on your credit report in July 2014, and assuming that the 3 year wait starts at that point. This is a common mistake that inexperienced lenders make. You are not going to be eligible in 2017.

          All this being said, if you have 20% down, there are lenders that will help. The rates and fees are a little higher than traditional financing, but it will get you into the home, and you can refinance next year when the BK seasons.

          Again, if you would like an introduction to a lender that can help with this, shoot me an email to [email protected] and I can make that introduction for you.

          Hope this helps?

          comment by Scott Schang
          on 2.8.17 at 7.43 am
  38. Good morning! I have a question. We recently completed a deed in lieu on second home in New Jersey and gave been living in Arizona for the past 12 years and have never missed a payment on our home. Is it possible to obtain a mortgage if we sold out current home and had 10-20% down towards a new home?

    comment by Allison Shamrock
    on 2.5.17 at 6.50 am
    1. Hi Allison,

      Unless the mortgage on the NJ home was discharged through a bankruptcy, you would still be subject to the waiting periods having had the deed in lieu.

      That said, there are loan programs that will allow you to buy with 20% down payment that carry a little higher rates and fees.

      If the NJ mortgage was discharged through bankruptcy, you could be eligible for conventional financing 4 years from the discharge date, and ignore the deed in lieu.

      Hope this helps?

      comment by Scott Schang
      on 2.5.17 at 9.17 am
  39. Thank you for putting these guidelines in plain simple English. I had a foreclosure on an investment property in 2013 that is preventing me from refinancing my high interest primary home loan. The scenario with the foreclosure was due to fraud by the developer. It was a pre-development lot. The developed took all the money, the never developed the sub-division, and then filed for bankruptcy, and we all were left holding pieces of dirt. I later heard the developer in fact was jailed for illegal mortgage practice and fraud. Does this allow me in some ways to either remove the foreclosure from my record or apply for extenuating circumstances? I haven’t found any broker interested even to look into Fannie Mae extenuating circumstances route. Thanks for any advice.

    comment by Satchi
    on 2.2.17 at 10.03 pm
    1. Hi Satchi,

      That is a very good question..is this an extenuating circumstance? Absolutely, yes. Is an underwriter willing to dig into it, document it, and get prior-approval from Fannie Mae? That’s an entirely different question.

      I can warn you that going down this path means documenting that any payments due from you would have had to have been paid throughout this process. You would have to show that you made every attempts to honor your side of the contract, and that the illegal activities alone are responsible for the foreclosure.

      Another question I guess I have is, if the lender took the deposit and ran, what was foreclosed? If no payment was due, and there was no home, how is this a foreclosure?

      Shoot me an email to [email protected] – I am very curious about the answers to these questions, and I might be able to point you in the right direction of a lender that would be willing to help. Also let me know what State your primary residence is in?

      comment by Scott Schang
      on 2.3.17 at 8.10 am
  40. Do these guidelines apply for Home Equity loans as well? I had a DIL in February of 2016 for my former home and would like to get a new Home Equity loan on my current home to consolidate bills. Just wondering how long I have to wait for that. Thanks!

    comment by Karen
    on 2.2.17 at 1.58 pm
    1. Hi Karen,

      Since Home Equity Loans do not typically follow Fannie Mae or FHA guidelines, it would be up to the lender to write their own guidelines. Most traditional banks that I know of follow fannie mae guidelines because they are the most restrictive. I would suggest maybe talking to credit unions. They tend to consider these scenarios on more of a deal by deal basis from my experience.

      Hope this helps?

      comment by Scott Schang
      on 2.2.17 at 3.14 pm
      1. It sure does! Thank you much!

        comment by Karen
        on 2.2.17 at 3.17 pm
  41. Hello. I signed DIL in January ’17. Is the standard waiting period three years in all states from date signed for FHA? How does DIL apply to buying land to build and paying it off prior to waiting period on a construction loan? Or is that an option? Also, how do they calculate tax on DIL? Would a tax attorney or CPA me best help on this matter? When does it show on your credit report? Nothing negative is showing on my credit report since it sold three years ago to this mtg. co. shows sold. Mtg. Brokers in this area know very little about DIL. I’m afraid I made a mistake by accepting this offer.

    comment by Jonna Lackey
    on 2.1.17 at 9.01 pm
    1. Hi Jonna,

      FHA is going to require a minimum 3 year wait from the date your name was removed from title.

      Yes, you would want to discuss the tax liabilities with a CPA or tax attorney. If the mortgage was not discharged in the bankruptcy, you could be liable to pay taxes on any losses the lender occurs due to a deficit between what is owed, and what they can sell it for. In some States, if the default occurs on a primary residence, on the loan used to purchase the home, it could be considered a non-recourse loan, and you would not be liable for the taxes. Check with an attorney or CPA.

      Construction and land loans are not typically underwritten using FHA or Fannie Mae guidelines, so they make their own rules regarding the waiting periods after a deed in lieu of foreclosure.

      Hope this helps?

      comment by Scott Schang
      on 2.1.17 at 9.17 pm
  42. Hi I filed bankruptcy in 2011 my house was house was discharged in bankruptcy. I tried everything to get the deed out my name short sale deed and Lui the bank denied everything and my home has been vacant for 6 years. My home is in forclosure with no sale date for 7 years the bank wont forclosure do I have to wait til the deed is no longer in my name to buy again under Fannie Mae if so I’m screwed I won’t ever be able to buy again because bank wont go forward with forclosure

    comment by Katrina Marrow
    on 1.31.17 at 12.08 pm
    1. Hi Katrina,

      You’re pretty much stuck if your name is still on title to the home. Have you attempted a short sale?

      comment by Scott Schang
      on 1.31.17 at 12.47 pm
  43. I lived in a house for 6 years after chapter 7 they have recently started forclosure … I offered deed in leu so I wouldn’t have forclosure on my credit chapter 7 was discharged 2011 May.

    comment by Kerri Passwaters
    on 1.31.17 at 11.01 am
    1. Hi Kerri,

      If your mortgage was included in the bankruptcy, neither a foreclosure or deed in lieu will show up on your credit. Your mortgage stopped reporting to your credit as soon as it was discharged.

      Whether you do a short sale, deed in lieu, or foreclosure may affect the timeline for buying another home depending on what type of financing you are trying to use.

      Using conventional financing, you would be eligible to buy again as soon as your name is removed from title, regardless of how it is removed.

      Hope this helps?

      comment by Scott Schang
      on 1.31.17 at 11.05 am
  44. I filed bankruptcy in 2012 my house was included in it but stated it was stated in the documents keeping home as a loan modification. The Modification was denied by the Bank in May 2013. In August 2014 the home foreclosed on. What date can I actually buy a home again?

    comment by Amber
    on 1.31.17 at 7.53 am
    1. Sorry I left out, the Bankruptcy Chapter 7 was Discharged September 2012

      comment by Amber
      on 1.31.17 at 7.55 am
      1. Hi Amber,

        Your “intention” at the time of petition does not affect your ability to qualify for Conventional financing in 4 years from the discharge of a Chapter 7 discharge, regardless of when the foreclosure took place. This makes you eligible now!

        For FHA financing, the waiting period is 3 years from the foreclosure date.

        Hope this helps?

        P.S. If you would like an introduction to a lender that has experience with this guideline, shoot me an email to [email protected] and I can introduce to someone. Include the State you’re buying in 🙂

        comment by Scott Schang
        on 1.31.17 at 8.11 am
        1. Would this still apply to us even if the loan that was foreclosed on was a conventional loan?

          comment by Amber
          on 1.31.17 at 9.34 am
          1. Really good question Amber! Yes, that’s ok. If the mortgage that gets foreclosed is FHA or VA, and you are applying for a FHA or VA loan, the rules and timelines are different than the standard waiting period.

            Conventional foreclosure to conventional purchase is no problem.

            comment by Scott Schang
            on 1.31.17 at 10.09 am
  45. Here is our situation. Chapter 7 discharged in 2011. 1st and 2nd included. Continued making payments until 1/16. No payment since. Divorced in 11/16. Husband gets the house in the divorce. Currently negotiating with mortgage company no foreclosure started. Wife moves out and wants to buy a house as soon as possible. Wants to use low down payment conventional/VA financing. We have not quit claimed the title yet. Questions are should we quit claim asap? How soon can wife get a low down payment loan. Assuming no credit/income issues.

    comment by Martyfra
    on 1.30.17 at 1.24 pm
    1. Hi Marty!

      Oh my gosh, I’m so sorry….yes, I get hundreds of questions a month. I’m usually pretty good at catching them all, so I apologize that I missed yours 🙁

      There are a couple of things that need to take place here. First, the divorce decree should specifically state that wife is not responsible for loan. If that’s the case, that wife is not responsible, I would do a grant deed to remove her from title ASAP.

      As soon as wife is off title, if you were in California, I would be able to do a conventional purchase loan immediately (4 years from discharge of BK7).

      I do have lender friends that are pretty experienced around the Country that might be able to help as well. Most lenders would probably just say no because there are too many moving parts and they do not have experience with these types of scenarios.

      If the current loan on the home is either FHA or VA guaranteed, this could cause challenges since they do not use the BK discharge as the waiting period start date.

      Again, if wife is off title, I think this can be done. It’s not going to be super easy though.

      Hope this helps?

      What State are you buying in? Maybe I can introduce you to someone that can help dig into this a little deeper.

      comment by Scott Schang
      on 1.31.17 at 10.19 am
  46. I want o buy a home in KC to eventually retire in while I am working in St Louis How long will I have to wait after a short sale to get a mortgage. I am renting in ST Louis and want to buy in KC

    comment by Frank Disensi
    on 1.30.17 at 12.40 pm
    1. Hi Frank, if the mortgage was included in a bankruptcy, there is a 3 year wait to use FHA financing, and a 4 year wait from the short sale to use conventional financing.

      Hope this helps?

      comment by Scott Schang
      on 1.30.17 at 12.53 pm
  47. I have to retire early due to health issues. I plan to release current home to bank in lieu of foreclosure
    What are my options for obtaining a new home or place to stay?

    comment by M. Simmons
    on 1.29.17 at 8.26 am
    1. If the home is not included in a Bankruptcy, you may want to discuss the potential for the deed in lieu causing a taxable event. Please consult your accountant, and/or a bankruptcy attorney to determine if the lender can send you a 1099 after a deed in lieu.

      You would be eligible to buy again in 3 years from the deed in lieu using FHA financing, or 4 years using a Conventional loan.

      Hope this helps?

      comment by Scott Schang
      on 1.29.17 at 9.14 am
      1. Is there a good time to have a telephone discussion with you about additional mortgage questions?

        comment by M. Simmons
        on 1.29.17 at 10.49 am
        1. comment by Scott Schang
          on 1.29.17 at 11.03 am
  48. Scott, I am in the military and lost my VA loan benefits due to a short sale. According to the VA I would have to pay back $63,000 to get it reinstated. My short sale was done in December 2013 and signed the paperwork on 14 January 2014. Am I still stuck until December 2017 before I can use a conventional loan? My credit score is 757 and I have no debts right now. I have a substantial amount in savings. I just want to know if I can continue with my house purchases?

    comment by Tony
    on 1.27.17 at 10.52 am
    1. Hi Tony, yes, conventional is 4 years from the short sale date unless the mortgage was included in a bankruptcy. The only other option would be a portfolio loan, which would allow you to buy with 20% down, and a little bit higher rates and fees. From a financial perspective, that additional investment might still make sense for you to carry you through the next 11 months. If you would be interested in exploring this option, shoot me an email to [email protected] and let me know what State you’re buying in.

      comment by Scott Schang
      on 1.27.17 at 6.26 pm
  49. Hello Scott,

    First off thanx for all of the help and attention you have given people here on your site. Obviously you love what you do and are very knowledgable.

    So mine is more of a question of how do i financially qualify for a loan.

    For starters I have a bankruptcy (7) that discharged January 2014, reestablished credit 3 months after that with credit cards and a car loan and have paid on time without fail. My credit score is about 680 and i have enough money for a FHA down payment and some left in reserves after that. Obviously i’ve past the 2 year waiting period and i’m ready to buy right ??? wrong!!!

    The issue i am having is one of Income. I run my own business and technically I make enough to qualify for a loan but not according to a few mortgage brokers i have spoken to. The problem seems to be that when i worked for others my income was based pretty much on the gross earnings and now that i work for myself i sadly and shockingly found out its based more so on the NET amount !!! Well we all know businesses can write off expenses till the cows come home…and on the way home my cows not only come home with empty udders they also owe milk to the dairies…hahaha….Basically my business tax returns show that i am operating at a loss…Which i’m really not, i just have a lot of legal write offs.

    Its very demoralizing working hard for the last 2 years to make sure that my income was not going to be an issue by earning more than i made when i worked a conventional job only to find out that it was all for naught. :-(…. My personal tax returns show $0 income because there was no money left from all the business write offs to pass on to me (and will be that way for several more years). Obviously I made money and in actuality have even been able to save more money due to not having to pass it on to the government in taxes.

    At this rate it seems like on paper i will NEVER qualify for a house based on my tax returns…Is there a way to overcome this hurdle without having to put down a huge down payment or worse yet foregoing all of my legal writeoffs to achieve a net income that can be used to qualify??? I am sure i am not alone in this dilemma

    comment by Doug
    on 1.26.17 at 12.29 pm
    1. Hi Doug,

      Yes, unfortunately you are stuck in the self employed hell that does not have a good answer in 2017. There are no such things as stated income loans anymore, lenders are going straight off NET taxable.

      There are self employed options that will allow you to use bank statements as income, but expect a minimum 20% down, and higher rates and fees than a traditional, FHA loan.

      Last question, was there a mortgage included in that bankruptcy? If so, that changes things as well.

      comment by Scott Schang
      on 1.26.17 at 12.38 pm
      1. There were no foreclosures included in the BK …. however they occurred approximately 5 to 6 years prior to the BK … The reason for the BK was so that i didn’t have to pay taxes for the continued 1099C’s I started to receive over time (I had 11 properties).

        I listed each and every bank I ever had a loan with as well as the debt collectors that were trying to collect on those pesky 2nd mortgages at the time. I’m 100% sure i stomped them all out 🙂

        Based on that does that change anything???

        I’ve read some of the horror stories here with BK’s happening and then being surprised to find out from the grave that an old house has reached their hand out of the grave to screw things up because somehow the property is still attached to them. Is there anything you can suggest that i do in the meantime to make sure/verify none of those 11 houses haunt me???

        Thanx so much and i appreciate your time

        comment by Doug
        on 1.27.17 at 7.19 am
        1. Hi Doug, I am not a bankruptcy attorney, but from what I understand (including personal experience) you do not have to specifically list every single debt in the BK. If you had the debt at the time of filing, it is considered to be included in the BK unless specifically reaffirmed outside of bankruptcy protection.

          If you missed a creditor, they may not have received notice of the discharged of their debt. I would consult your BK attorney, but I believe you would simply have to show that you filed, and all of those mortgages were discharged through the bankruptcy.

          comment by Scott Schang
          on 1.27.17 at 7.24 am
          1. Wow that was quick!!! Here i was thinking i had to clarify … You’re a sharp one!!!!

            Thanx again

            comment by Doug
            on 1.27.17 at 7.28 am
      2. Sorry Scott I think i answered you incorrectly…Yes there were mortgages included…I think??? As i commented earlier the houses were foreclosed on and there were some 2nd mortgage debt still floating around. I definitely placed those in the BK. I “THINK” I may have put the 1st mortgages for all the properties on the bk just for good measure.

        comment by Doug
        on 1.27.17 at 7.26 am
        1. I understood your answer, and my reply remains the same. You may be receiving 1099’s because the creditors were not notified of the discharge, or the debt was sold and you didn’t know who the new servicer was at the time you filed.

          Either way, I believe bankruptcy law would protect you from receiving those 1099’s. I would consult your BK attorney for legal opinion.

          comment by Scott Schang
          on 1.27.17 at 7.29 am
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