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Cyndi Mino
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Good News for FHA Short Sellers!

I have some good news if you had to Short Sell your home with an FHA loan…..Yes, I’m sure that you have read the guidelines below for buying a home after a short sale – 2 years, 4 years, 7 years, FHA, conventional 10 or 20% down??? – Have you read these?

Buying a House with an FHA Loan – 3.5% down payment – With FHA’s current guidelines, you can buy a home immediately after a short sale as long as the mortgage and existing debt has 0 late payments in the past 12 months.  Personally, I have never had a lender approve a short sale where the mortgage holder was current on their payments.

Buying a House with a Conventional 20% down Loan – You can buy a house after  two years with a 20% down payment using a conventional loan.  With Fannie/Freddie Loans, you will have to wait 4 years if you only have 10% down payment or possibly wait just 2 years if you have extenuating circumstances that lead to the short sale of your home.

Buying a House with an FHA loan after doing a Strategic Default – If you did a strategic default as defined below on your primary residence: you may not qualify for a 3.50% FHA Loan in the foreseeable future!  A strategic default is when you sold your home to take advantage of the housing market’s past decline and purchased another similar or better house at a reduced price, which is within commuting distance to the house you previously sold. If  the short sale of your home was a strategic default then you would have to wait 7 years to qualify for a loan to buy a home again.

If you did have a Strategic Default on your primary residence and would like to use a conventional loan to buy a house, you will have to wait 7 years to buy a house again.

Now here is good news I have for you – I have a client whose house I did a Short Sale for last year – it closed escrow earlier this year.  It took almost a year for it to close since the loan was sold midway to another lender.   She was relocated out of state for employment, one of the many reasons a short sale may be granted.  This was an FHA loan and another reason for it taking so long, there are a lot more guidelines to selling an FHA loan.  This buyer/seller called me yesterday to tell me that just 4 months after closing escrow on her FHA short sale, she has been approved for a new mortgage even higher than she had before!   It took time and a lot of due diligence on her part to find a lender who would do the financing – none of the “big banks” – Wells Fargo, Bank of America or Chase – would even talk to her, they gave her the same guidelines as spelled out above.  She went to 15 different banks, from the big ones to the smaller personal boutique banks and talked to the representative of each, and then followed up with the Bank Presidents.  She just wanted to call and give me an update and told me to spread the word that it CAN be done – with a lot of hard work.  She did work at building her credit back up as a Short Sale can be a big hit on your credit..

SO, you can get another loan in less than 2 years even if you had an FHA loan on your short sale……..Contact me below if you would like more information……..

Posted on May 27, 2013 at 11:09 am by Cyndi Mino

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