How Long do I Have to Wait After a Bankruptcy, Short Sale or Foreclosure?

I get this question all the time and I finally got smart and decided to post it here for everyone….There are so many things I want to share and so little time to write about all of it!

The Guidelines are different depending on whether you’re using an FHA loan or a Conventional loan to purchase a new home.

These guidelines have changed quite a bit over the past two years (becoming more strict) and are accurate as of the date of today’s post – 11/25/2009.

Conventional Waiting Guidelines (Fannie Mae)

Bankruptcy – You may apply for a Conventional, Fannie Mae loan after your bankruptcy has been discharged for FOUR (4) years.

Foreclosure - You may apply for a Conventional, Fannie Mae loan FIVE (5) years after the sale date of your foreclosure. Additional qualifying requirements may apply,

Short Sale / Notice of Default – You may apply for a Conventional, Fannie Mae loan after TWO (2) years of notice of default filing or completion of short sale.

FHA Waiting 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 date of your foreclosure.

Short Sale / Notice of Default - 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.

Tagged as: bankruptcy, fannie mae, FHA, foreclosure, Short Sale, waiting period

{ 2 comments… read them below or add one }

1 Eugene Pixley January 12, 2010 at 12:31 pm: We bought our house in October 2003. We have a current mortgage that has been paid monthly. We refinanced in November 2009 and got a lower interest rate (fixed, as was the original).

My question: Does this purchase qualify for the tax program ending April 20, 2010? (I can find no reference to the purchase date requirement in the material received from you.)

Eugene Pixley
2 Scott Schang January 13, 2010 at 8:50 am: Great question Eugene, the credit is only available to those that purchase a primary while the law is in effect. The tax credit will not apply on a refinance.