Boomerang Buyers After a Short Sale or Foreclosure

Bankruptcy,_Foreclosure_Header

 

One of the most common conversations for any loan officer starts out “ I had a short sale or foreclosure __ years ago and was wondering if I can buy a home.” If you are one of the millions of homeowners who lost their home through foreclosure or short sale during the housing crisis, you are considered a Boomerang Buyer and the time for reentering the housing market may be now.

Foreclosure, the minimum waiting period begins when the title was transferred back to the lender. 

  • Conventional,  7-years
  • FHA,  3-years
  • USDA,  3-years
  • VA,  2-years

Pre-Foreclosure, Deed in Lieu of Foreclosure, or a Short Sale, the waiting period begins when the title was transferred back to the bank or tho the new owner. 

  • Conventional, 4-years
  • FHA, 3-years
  • USDA, 3-years
  • VA,  2-years          

Loan Modification:

  • Conventional,  2-years with a Fannie Mae DU approval 
  • FHA,  There is no waiting period but there cannot be any late payments in the prior 12 months
  • USDA,  3-years from the modification completion date
  • VA,  12-month satisfactory credit history after the event

Chapter 13 Bankruptcy:

  • Conventional Loan,  2-years from discharge or 4-years from dismissal
  • FHA,  1-year payout has elapsed with all payments made on time and permission from the                                     court for new mortgage- No wait time if discharged or dismissed
  • USDA,  1-year payout has elapsed with all payments made on time and permission from the court for new mortgage- No wait time if discharged or dismissed
  • VA,  1-year payout has elapsed with all payments made on time and permission from the court for new mortgage- No wait time if discharged or dismissed

Chapter 7 Bankruptcy:

  • Conventional,  4-years from discharge or dismissal date
  • FHA,  2-years from discharge or dismissal date
  • USDA,  3-years from discharge or dismissal date
  • VA,  2-years from discharge or dismissal date

Your foreclosure, short sale, or bankruptcy will remain on your credit report for 7 years after the transfer of title or discharge of the bankruptcy. The good news is, you do not have to wait that long to reenter the housing market. The key is reestablishing your credit. If you haven’t reestablished your credit, I can help. I am working with a couple that did not qualify when I met with them last October. One of the borrowers had a 550 credit score. We created a plan and raised her score over 90 points in less than 3 months. They now qualify for a 100% VA loan and a non-repayable down payment assistance grant from either the Nevada Housing Division or the Nevada Rural Housing Authority. They are shopping for homes in the $350,000 range and the grant will cover all of their closing costs.

Once you have met the minimum waiting requirements and reestablished your credit, it is time to get pre-approved and start shopping for a home. We have non-repayable grants equal to 2-5% of your loan amount to help with your down payment and closing costs. You do not have to be a first time buyer to qualify for the non-repayable grants. If it has been 3 years or more since the transfer of your former home, you are considered a first time buyer. Our first time buyer programs will save you thousands of dollars on your mortgage.

Boomerang Buyers and minimum waiting periods after a Bankruptcy, Foreclosure, or a Short Sale will be this week’s topic on our “All Things Home” show 4:00 PM on Wednesday on 1180am, America Matters Radio. My co-host, Regina Lockwood of Ferrari-Lund Real Estate and I will be happy to answer your questions. You can call in to “All Things Home” at 775-827-8900.

We prepared a waiting period reference guide for those who have had a bankruptcy, foreclosure, short sale, or a prior loan modification. Email me at doug.kaller@academymortgage.com and I will email a copy of the reference guide to you. If you are a Boomerang Buyer looking to again be a homeowner or have questions or concerns about qualifying or your credit, call me at 775-828-7006. I want to help. Interest rates are great, home prices will never be better, and there are non-repayable grants to help with your down payment and closing costs.