If you are thinking about selling your home as a short sale or recently did, you might wonder how long until you can get back into the real estate market. Turns out it may not be as long as you think! Here are a couple guidelines that have been announced this year:
- Right Away with FHA Loan – FHA will allow you to purchase right away if you did a short sale but had no mortgage lates and you did the short sale to relocate out of the area for work, etc. They have to deem that you didn’t just sell your home to take advantage of the housing market and buy again in the same area
- Within 3 Years with FHA Loan– FHA will allow you to buy after 3 years of closing the short sale even with mortgage lates. Of course your credit score at that time is still going to be a factor for qualifying
- Within 2 Years Fannie Mae Loan – Fannie Mae will allow you to buy after 2 years of closing a short sale with 20% down. Again, depending on your credit score with the lender you are trying to obtain a loan with. If you are putting down 10%, the waiting period is 4 years
- 3 to 5 Years Freddie Mac Loan – Freddie Mac is currently a little more strict. They require 3 years of good credit history before lending again if the borrower can document extenuating circumstances for the short sale. If they cannot, the waiting period is 5 years.
And if you ever needed a good reason to do a short sale vs just walking away and letting the home get foreclosed on… almost all investors require 7-10 years waiting period if the investor concludes that you purposely walked away without trying other avenues such as a short sale!
*** Please be sure to check with your lender for current wait times and and approval conditions as they change often!
For more info on Effects of Short Sale vs. Foreclosure please visit our dedicated Short Sale Website
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