If you have gone through foreclosure before know that yes, it is possible. Known as "Boomerang Buyers" those previously foreclosed on are starting to join the market and are able to purchase a home. However, there are waiting periods for most of the common loan programs. Depending on the type of loan you are applying for here's how long you must wait before being eligible for a home loan again:
2015 FHA Mortgage Guidelines
| Bankruptcy Chapter 7 | 2 Years From Chapter 7 Bankruptcy Discharge Date |
| Bankruptcy Chapter 13 | 1 Year From Chapter 13 Bankruptcy Discharge Date |
| Foreclosure | 3 Years From After the Sale/Deed Transfer Date |
| Short Sale or Deed in Lieu | 3 Years After the Sale Date of Your Foreclosure |
Credit with a minimum of 640 credit score and proof of good payment history. If you defaulted on a FHA loan, and you are trying to apply for a new FHA loan, the waiting period will be calculated from the date the mortgage insurance was paid by FHA on the defaulted loan.
2015 Conventiona (Fannie Mae) Home Loan Guidelines
| Bankruptcy Chapter 7 | 4 Years After Chapter 7 Bankruptcy Discharge Date |
| Bankruptcy Chapter 13 | 2 Years From Chapter 13 Bankruptcy Discharge Date |
| Foreclosure | 7 Years From After the Sale/Deed Transfer Date |
| Short Sale or Deed in Lieu | Waiting period for any foreclosures after that, which was included in Bankruptcy is waived. If mortgage is included in Bankruptcy, waiting period defaults to four years from the discharge date. Short Sale or Deed in Lieu of Foreclosure not included in a bankruptcy has a new waiting period of four years from date your name is removed from title. This replaces the ability to buy in 24 months with 20% down payment and minimum 680 credit score. |
Credit with a minimum 620 credit score and the date of Credit Report must be after the above waiting period to be eligible for Conventional financing after hardship.
2015 VA Loan Guidelines
| Bankruptcy Chapter 7 | 2 Years After Chapter 7 Bankruptcy |
| Bankruptcy Chapter 13 | If you have finished making all payments, the lender may conclude that you have satisfactory credit. If you have made on-time at least 12 months of payments, and the Trustee or the Bankruptcy Judge approves of the new credit, the lender may give favorable consideration prior to discharge. |
| Foreclosure | 2 Years From After the Sale/Deed Transfer Date |
| Short Sale or Deed in Lieu | 2 Years After the Short Sale, unless it was a VA loan then restrictions apply |
Credit with a minimum 620 credit score and proof of good payment history.
2015 USDA Guidelines
| Bankruptcy Chapter 7 | 2 Years From Chapter 7 Bankruptcy Discharge Date |
| Bankruptcy Chapter 13 | 1 Year From Chapter 13 Bankruptcy Discharge Date |
| Foreclosure | 3 Years From After the Sale/Deed Transfer Date |
| Short Sale or Deed in Lieu | 3 Years After the Sale Date of Your Foreclosure< |
Mortgage debt included in Bankruptcy will go by the discharge date, and other foreclosures after, short sale, or ded in lieu of foreclosure will not count as an additional waiting period, as long as you are off title for any defaulted mortgages.
2014 Jumbo Mortgage Guidelines
| Bankruptcy |
4 Years, 5 Years if Multiple Bankruptcy Occurs on Credit Profile |
| Foreclosure | 7 Years From After the Sale/Deed Transfer Date, Additional Qualifying Requirements May Apply |
| Short Sale or Deed in Lieu | 4 Years After the Sale Date of Your Foreclosure With a Maximum of 80% Loan to Value |
Extenuating Circumstances
It is possile to file for an exception to shorten any of these waiting periods, but it is very difficult to qualify for extenuating circumstances. Extenuating circumstances is most commonly limited to:
- Death of Primary Wage Earner
- Permanent Disability of Primary Wage Earner
- One-Time Financial Hardship That Was Completely Outside the Borrower's Control
Rarely do people qualify for an extenuating circumstance exception. Divorce, switching jobs, or having a failed business are not considered extenuating circumstances by most lenders.
“Homeownership done responsibly is still one of the best disciplined wealth-building strategies, and there is much more data available for home-buyers than there was five years ago to help them make an informed decision about a home purchase.”
~ Chris Pollinger, Senior Vice President of Sales at First Team Real Estate
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