Fannie Mae made 2 changes that will affect home buyers who have had a previous short sale.
- Buyers who had a 20% down payment could repurchase again after only 2 years. Buyers now have to wait 4 years instead of 2 years to purchase a home, regardless of the size of their down payment.
- Until August 16th, buyers with a prior short sale and a 5% down payment had to wait 7 years to qualify to repurchase a home. Now buyers only have to wait 4 years.
When can I buy again after having a short sale?
Here
are the current waiting periods for a buyer who had a prior short sale
and wants to use either conventional, FHA or VA financing.
Conventional.
As of August 16th, it is 4 years before a buyer can repurchase again
using Conventional financing. So no matter what size the down payment
is, either 40%, 20% or 5% down, a buyer with a prior short sale has to
wait 4 years now across the board before they can get conventional
financing again.
FHA. It is 3 years before a buyer can repurchase again using FHA financing.
*FHA TIP:
The FHA has a loophole that not many people know about. If a FHA buyer
did not have any late payments before their short sale, they are allowed
to qualify again with no waiting period for FHA financing.
New FHA Short Sale Rule for 2014.
The FHA introduced a new rule in 2013 that reduces the waiting period
that buyers must wait after a bankruptcy, foreclosure or short sale
before qualifying for an FHA-backed mortgage. The buyer must have
experienced an “economic event” whereby their household income fell by
20% or more for a period of at least six months.
The
period had previously been two years following a bankruptcy, and three
years following a foreclosure or short sale. The agency has now reduced
the waiting period to only ONE YEAR.
For
additional information on how to qualify under this new FHA rule, check
out this article HERE in the San Diego Union Tribune newspaper.
VA. It is only 2 years before a buyer can repurchase again using VA financing.
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