How long do you have to wait to buy after a Short Sale, Deed-in-Lieu, Foreclosure or Bankruptcy?
How about 1 day? Ask us about our Non-QM loans at Certified Home Loans! See the chart below for all Conforming loan products.
Fannie Mae Freddie Mac FHA VA Jumbo Loans
Derogatory Event Waiting Period Requirements Waiting Period Requirements with Extenuating Circumstances Waiting Period Requirements Waiting Period Requirements with Extenuating Circumstances Waiting Period Requirements Waiting Period Requirements with Extenuating Circumstances Waiting Period Requirements Waiting Period Requirements with Extenuating Circumstances Waiting Period Requirements Waiting Period Requirements with Extenuating Circumstances
Bankruptcy — 4 years from discharge date 2 years from discharge date 4 years from discharge date 2 years from discharge date 2 years from discharge date 1 year ^^ 2 years from discharge date 1 year ^^ 4-7 Years from completion date **
Chapter 7 or 11 • Re-established good credit
Bankruptcy — • 2 years from discharge date • 2 years from discharge date 2 years from discharge date 2 years 2 years from discharge date 1 Year of the payout must elapse & payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage 2 years from discharge date 1 Year of the payout must elapse & payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage 4-7 Years from completion date **
Chapter 13 • 4 years from dismissal date • 2 years from dismissal date
Multiple Bankruptcy 5 years if more than one filing within 3 years from the most recent discharge or n/a n/a n/a n/a n/a n/a ** **
Filings the past 7 years dismissal date
Foreclosure 7 years from completion date 3 years 7 years from completion date 3 years from completion date 3 years from completion date Less than 3 years if: 2 years from completion date n/a 5-7 years from completion date **
Additional requirements after 3 years up • Re-established good credit
to 7 years:
• 90% maximum LTV ratiosa
• Purchase, principal residence
• Limited cash-out refinance, all
occupancy types
Deed-in-Lieu of Foreclosure 4 years from completion date 2 years — 90% maximum LTV ratios* 4 years from completion date 2 years from completion date 3 years from completion date Less than 3 years if: 2 years n/a 5-7 years from completion date **
and • No mortgage default
Preforeclosure Sale (Short Sale) • Re-established good credit
FHA ML 09-56
*The maximum LTV ratios permitted are the lesser of the LTV ratios in this table or the maximum LTV ratios for the transaction per the Eligibility Matrix.
**JUMBO waiting periods vary by lender
***For LTV’s greater than 80% – mortgage insurance guidelines may differ
Note: References to LTV ratios include LTV, CLTV, and HCLTV ratios.
 
Notes: References to LTV ratios include LTV, CLTV, and HCLTV ratios. For LTV's greater than 80%, mortgage insurance guidelines may differ. Maximum LTV ratios may be subject to the Eligibility Matrix. Waiting periods may differ from lender to lender. Lender overlays may apply.

All information is subject to change.

 

 FHA "Back to Work - Extenuating Circumstances"

Credit Issue

If credit issue is the result of a documented Economic Event**

Chapter 7 Bankruptcy

12 months must have elapsed since the date of discharge.

Chapter 13 Bankruptcy

Must have been discharged prior to the loan application and all required bankruptcy payments made on-time, or a minimum of 12 months of the pay-out period under the bankruptcy has elapsed and all required bankruptcy payments were made on time.

If the Chapter 13 bankruptcy was not discharged prior to the loan application, the borrower must obtain written permission to proceed with a mortgage transaction from the bankruptcy court.

CAIVRS

If the CAIVRS screening indicates a claim has been paid within the last 3 years on a loan insured on the borrower’s behalf by FHA, a request for a waiver or resolution of the unresolved issue may be submitted. The CAIVRS must be cleared prior to closing.

Collection Accounts

Must document all collections and judgments were due to economic default.

Foreclosure & Deed-in-Lieu

Minimum 12 months must have elapsed from the date of completion. If the previous loan was an FHA loan, 12 months must have elapsed from the date when FHA paid the initial claim to the lender.

Mortgage History

Any open mortgage is 0x30 in last 12 months.

Credit

No current late housing payments or installment payment. No major credit issue on revolving.

Non-traditional

No lates on rental payments; max 1x30 on payments due any other creditor, and no collection / court records.

Short Sale/Pre-Foreclosure

12 months must have elapsed since the date of sale.

  • **An Economic Event is any occurrence beyond the borrower’s control that results in Loss of Employment, Loss of Income, or a combination of both, which causes a reduction in the borrower’s Household Income of twenty (20) percent or more for a period of at least six (6) months.
  • Minimum mid-credit score 580 

Exception: The lender may grant an exception to the xx-year requirement if the derogatory event was the result of documented extenuating circumstances that were beyond the control of the borrower, such as a serious illness or death of a wage earner, and the borrower has re-established good credit since the derogatory event.

"Divorce is not considered an extenuating circumstance. An exception may, however, be granted where a borrower's loan was current at the time of his/her divorce, the ex-spouse received the property, and the loan was later foreclosed."

Note: "The inability to sell the property due to a job transfer or relocation to another area does not qualify as an extenuating circumstance."

HECM Reverse Mortgage Purchase

Based on ML 09-11 and HB 4155.1, an applicant who has had a foreclosure in the last 3 years, FHA or Conventional, is not eligible for a HECM for purchase. This includes the following: 

  • A filed NOD (Notice of Default)
  • A deed in lieu of foreclosure
  • A mortgage delinquency of 120 days or greater will be considered the equivalent of a NOD, regardless of whether foreclosure action has been commenced
  • Short Sales (A short sale payoff or a settled mortgage account is considered a foreclosure event) 

Content provided courtesy of CHL, LLC


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