At a class a couple of days ago, Elvis Saloum of Arizona Wholesale Mortgage talked about lender guidelines as to when a buyer may expect to qualify for a loan to buy real property again after going through a short sale, a foreclosure or a bankruptcy. I always refer my buyer clients to a lender - so they know for certain if they qualify for a purchase and for how much - but these notes give me some idea of what they may expect to hear, generally speaking. Individual circumstances will vary.
Conventional Loan:
4 years after bankruptcy (two years, with extenuating circumstances)
7 years after foreclosure (three years, with extenuating circumstance, with 10% down)
2 years after short sale with 20% down
FHA Loan:
2 years after bankruptcy (one year, with extenuating circumstances)
3 years after foreclosure
3 years after short sale - unless no mortgage payments late in past 12 months and buying in different geographic location
VA Loan:
2 years after bankruptcy (one year, with extenuating circumstances)
3 years after foreclosure
2 years after short sale
Again, individual circumstances vary. The better the credit scores, the better a buyer's ability to get back into the real estate market. I'm glad I work with good lenders who are willing to work with buyers to help improve their credit scores.
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