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“Seasoning” for BK, Foreclosure, Short-Sale – Revised (Important Information)

Below is a summary of the Seasoning Requirements for Major Derogatory Credit Events, for both FHA and Conventional Loans. Note that the “Short Sale” rules are the same for FHA and Conventional Loans.

I. CONVENTIONAL/NON FHA (Conforming) LOANS
A. FORECLOSURE: 5 Years from Sale Date
B. SHORT SALE or SHORT PAY-OFF: This is “case by case” depending on how the credit agencies report the short sale (there is tremendous variance). Sometimes the credit reports are surprisingly lenient and short selling borrowers can garner competitive financing as soon as one year after a short sale.
C. BANKRUPTCY: 4 Years from Discharge is standard, BUT the seasoning period can be as short as 2 years if there are “extenuation circumstances” (BK was beyond control of borrower; Borrower re-established credit; BK was a one time event and there was no bad credit before or after; etc.)
II. FHA LOANS
A. FORECLOSURE: 3 Years from Sale Date
B. SHORT SALE or SHORT PAY-OFF: This is “case by case” depending on how the credit agencies report the short sale (there is tremendous variance). Sometimes the credit reports are surprisingly lenient and short selling borrowers can garner competitive financing as soon as one year after a short sale.
C. BANKRUPTCY: 2 Years from Discharge.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646