Buying a Home Again After Short-Sale or Foreclosure

By helping many people purchase a home again after a Short-Sale or Foreclosure I learned there is massive confusion about the waiting periods. Many people are back on their feet and re-entering the market to buy again, so called “boomerang buyers”, who need help.

Hopefully this article will be a clear guide to the waiting period and options. If you have any questions feel free to contact me.

Jumbo loans

Short-Sale – This varies from investor to investor. Some are 4 years , some are 7, some do not allow any ever. Typically the wait period is from the date of the sale to the application date on the new loan.

Foreclosure – This also varies from investor to investor. Most are at 7 years, although there are quite a few that don’t allow any. Typically

The good news is there are portfolio programs that are No wait after Short-Sale or Foreclosure. You’ll pay a little more on these, and they are typically used to get you in the home with the idea of refinancing a few months or a few years down the road.

Conforming/Conventional loans (loans under $417,000 unless in high cost areas like Contra Costa county which is $625,500)

Short-Sale – The standard waiting period is 4 years* from the closing date of the Short-Sale. The application date can be before this, but you cannot close prior to the 4 year mark.

Foreclosure – The waiting period is 7 years *. If loan was included in a bankruptcy and discharged the waiting period is is 4 years after discharge for chap 7 or 11 and 2 years after.

*Extenuating circumstances can make it possible to buy 2 years after the short-sale or 3 years post Foreclosure. What many people think are “extenuating” are actually not, these can be difficult to get approved.

Portfolio loan option for no waiting period – These are now available and do not require any wait period. They typically require at least 20% down of your own funds. You can also expect the rate to be higher than a conventional loan.

FHA

Short-Sale or Foreclosure – The waiting period is 3 years*.

*FHA does have a “back to work” program which shortens the period to 1 year, but is very difficult to approve because of the requirements.

VA

Foreclosure or Short-Sale – The waiting period is 2 years.

Feel free to contact me for your specific scenario

Craig Bosse

loan officer

craig.bosse@banchomeloans.com

(925) 849 1807

Banc Home Loans

2121 N. California Blvd # 625

Walnut Creek, CA 94596

NMLS# 1019442