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I don’t know if a day goes by that I do not get an online inquiry or phone call from a Real Estate agent asking me, “How Long Does One Have to Wait To Purchase Again After A Foreclosure” [or short sale or bankruptcy for that matter].

A wounded economy that seems to be clinging on to life support has caused many homeowners to lose their home to foreclosure or short sale. Even worse, bankruptcy rates are higher than even. But recently I’ve began to see a shift in loan applications. I am seeing a lot of very qualified home buyers wanting to purchase, but cannot due to a foreclosure, short sale or bankruptcy they had 1-2 years ago. So what options do they have?

So what happens when these former homeowners recover from their hardship and get a better grip on their credit and finances? When can they buy a home again?

Let’s start with FHA, VA and USDA guidelines Borrowers that show “credit worthiness” after a foreclosure or a short sale must wait three years to buy again, and two years following a bankruptcy. In regards to a short sale, if the loan was in “foreclosure status” the three year wait applies.  However, If the borrower remained current on the loan during the short sale process, they may qualify for a FHA or VA home loan immediately. [contact me for more information…]

Fannie Mae and Freddie Mac take a little different approach. They require a three year waiting period following a foreclosure and a two-year wait after a short sale or discharged bankruptcy. However, if the borrowers can justify an “extenuating circumstance” (illness, death or job loss), their wait may be substantially reduced on a case by case basis. Fannie Mae and Freddie Mac reserve the right to impose stiffer penalties up to a seven year wait period depending on the applicant’s history.

My advice to all former homeowners that have experienced a short sale, foreclosure or bankruptcy is to speak with me immediately following the hardship and enroll in a credit restoration program that I offer.  Credit restoration does two things – (1) helps remove the derogitory information reported to the credit bureaus as a result of the foreclosure, short sale or bankruptcy (late payments, foreclosure reportings, and bankruptcy reportings); and (2) helps build new credit that will eventually cause a big jump in one’s credit rating. Most of the time, the credit bureaus ease up after 12 months following a short sale, foreclosure and bankruptcy and the negative events have less of an impact. That is why building credit after a hardship is so important.

If you have any questions on credit repair or putting together a game plan to purchase a home in Washington State, please feel free to contact Seattle FHA Mortgage Banker Dan Keller, and my Team will be glad to help you!

Other Valuable Links:
Washington State USDA Home Loans
Seattle FHA Mortgage
Seattle FHA 203k Home Loans
Help Me Fix My Credit Dan!
Seattle Fannie Mae HomePath Mortgage
Washington VA Home Loans

Dan Keller is a recognized Seattle area FHA and VA Mortgage Lender and is available to answer any questions you may have.  Dan can be reached directly at (425) 350-7136 or via e-mail at dankellermtg@gmail.com If you enjoyed the content in this article, please “LIKE” it below and feel free to share it!