Facing a Short Sale or Foreclosure: “When can I buy again?”

Notices of foreclosure posted on the doors to Phoenix area homes are not an uncommon sight.  In recent months, reports indicate upwards of 40% of the properties being sold are the result of short sales or foreclosures.  With the recent rough economic times, a number of people are finding themselves in situations beyond their control. They may have gone through a foreclosure, short sale, or bankruptcy and are asking the question, “When can I buy again?”

Steven Johnson, Senior Loan Consultant at Flex Mortgage, LLC in Tempe put together a great chart that provides some valuable information and may help answer that question.  Of course, no two situations are the same, so don’t take it as gospel, but it gives some generalized scenarios that may be helpful.

When Can I Buy Again?

Occurrence	Fannie Mae	FHA	VA	USDA Rural	Jumbo*
Foreclosure	7 yrs from Trust Deed Date	3 yrs from Trust Deed Date	2 yrs from Trust Deed Date	3 Yrs from Trust Deed Date	7 yrs from Trust Deed Date
Short Sale	2 yrs w/ Max 80% LTV 4 yrs w/ Max 90% LTV 7 yrs – Max LTV	3 yrs from completion Date *Per FHA ML 09-52, FHA financing can be obtained in less than 3 yrs under certain circumstances*	No specific information on this yet. Assume Foreclosure rule of 2 yrs	3 yrs from Completion Date	7 yrs from Completion Date
Chapter 7 Bankruptcy	4 yrs from Discharge Date	2 yrs from Discharge Date	2 yrs from Discharge Date	3 yrs from Discharge Date	7 yrs from Discharge Date
Chapter 13 Bankruptcy	4 years from Discharge Date	1 yr of the payout must elapse & payment performance must be satisfactory. Buyer must receive permission from the court to enter into a Mortgage	1 yr of the payout must elapse & payment performance must be satisfactory. Buyer must receive permission from the court to enter into a Mortgage	3 yrs from the discharge Date	7 yrs from the Discharge Date

If you have questions regarding the above, feel free to contact Steven at (480) 222-2122 or via e-mail at sjohnson@flexmtg.net, or consult with a licensed loan consultant.

Photo courtesy of Flickr by Casey Serin.