Fannie Mae came out with new guidelines for waiting period after short sale. Below is the updated waiting periods after a bankruptcy, short sale, and foreclosure for all loan types. One change was to the waiting period 4 years after a short sale for all levels of down payment for Conventional mortgages. The old guideline was 2 years with 20% down, 4 years with 10 – 20% down, and 4-7 years with less than 10% down.
VA*
- Bankruptcy 2 years with reestablished credit
- Foreclosure 2 years with reestablished credit
- Short Sale 2 years with reestablished credit
FHA*
- Bankruptcy 2 years with reestablished credit
- Foreclosure 3 years with reestablished credit
- Short Sale 3 years if delinquent at the time of the short sale
No waiting period if current on all debt at the time of the short sale
(Borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement on their principal residence to take advantage of declining market conditions and purchase a similar or superior property, if their short sale was on an FHA mortgage, or if they had a short sale due to job relocation.)
CONVENTIONAL
- Bankruptcy (Chapter 7) 4 years, or 2 years if documented extenuating circumstances and with reestablished credit
- Bankruptcy (Chapter 13) 2 years from discharge or 4 years from dismissal
- Foreclosure 7 years, or 3 years if documented extenuating circumstances with reduced LTV and with reestablished credit
- Short Sale 4 years, or 2 years if documented extenuating circumstances and with reestablished credit
USDA/RURAL HOUSING*
- Bankruptcy 3 years with reestablished credit
- Foreclosure 3 years with reestablished credit
- Short Sale 3 years with reestablished credit
*Previous foreclosure or short sale of a government insured loan (VA, FHA or USDA) resulting in a default claim may require a longer waiting period. This guide
is intended as general financial information based on current program standards. It in no way constitutes legal advice or credit counseling.
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