How Long Is the Wait to Buy a House After Foreclosure?

Fannie Mae and Freddie Mac have a 3-year waiting period following a foreclosure, and a 2-year wait following a short sale, deed in lieu, or discharge or dismissal of bankruptcy. However, if you can justify that the circumstance for the foreclosure or bankruptcy occurred because of an illness or job loss, or other “extenuating circumstance”, that may help reduce the wait before you can buy a home again. But with no such extenuating circumstances, you may have to wait longer, even up to seven years following a foreclosure or four years after bankruptcy.

For loans insured by the Federal Housing Administration (FHA), borrowers with good credit afterwards also will, in general, have to wait 3 years after a foreclosure and 2 years after a bankruptcy is discharged.

Following a short sale, borrowers will have to wait 3 years to secure another FHA loan, however, there are plenty of exceptions. Borrowers will have to wait 3 years if they were in default at the time of the short sale and had no extenuating circumstances. However, if the borrowers were on time with all their payments a year prior to the short sale, they may have no wait at all and might even qualify for an FHA loan immediately.

“The key is to avoid the foreclosure,” Andrew Wilson, a spokesman for Fannie Mae. Nevertheless it smart thing to do is to contact a credit repair specialist and see if they can remove your short sale or foreclosure off your credit file. Creditors who report negative items on your file have to sollow specific procedures. With the overlaod, amount of foreclosures, short sales they have to deal with, they do not follow the procedures, so either a lawyer or credit specialists will be able to find out if the banks have not followed the procedures when filing foreclosure or a short sale against you, and if they have not followed the right step, a credit specialist will be able to take off your foreclosure or short sale.

Do not hesitate to contact us and we will let you know rapidly if you have recourse.

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