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Qualifying After a Short Sale, Foreclosure or BK?

Once again, are the rules for qualifying for financing AFTER a Bankruptcy, a Foreclosure or a Short Sale. For FHA, borrowers need to wait 3 years from a foreclosure, and 2 years from a bankruptcy discharge, borrowers with short sales can get financing in as little as one year.

I. CONVENTIONAL LOANS:

A. Foreclosure: 5 Years of Seasoning Required

B. Short Sale/Short Pay-off – case by case, depending on what the credit report says, and circumstances. Can be as little as one year, especially because sometimes the credit reports are surprisingly lenient

C. Bankruptcy: 4 Years from discharge is standard, but can be 2 Years with “extenuating circumstances” (not their fault, re-established credit, one time event)

II. FHA LOANS

A. Foreclosure: 3 Years of Seasoning Required

B. Short Sale/Short Pay-off – same as above (at Flagstar) – case by case, depending on what the credit report says, and circumstances. Can be as little as one year, especially because sometimes the credit reports are surprisingly lenient.

C. Bankruptcy: 2 Years from discharge.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167