We address short sales often, but we still get many questions so we are addressing the issue again.
If a borrower is late with his mortgage payments (even once) prior to the short sale, then he cannot obtain FHA financing for 2 years or Conventional Financing for 4 years.
For Conventional Financing, the four years of seasoning is required, whether there were late payments or not.
For FHA, however, a borrower can obtain FHA financing immediately after a short sale if: (1) he was never late with mortgage payments, as stated above; and (2) he buys “down”.
Such a borrower does not need to show a “hardship” to obtain financing after a short sale. He merely must buy a house that is smaller than the house he just short-sold.
Lastly, it is a “myth” that borrowers must stop making mortgage payments in order to get a “short sale approval”. We have numerous borrowers right now who successfully completed short sales without missing a payment.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167