Fannie Mae Changes Waiting Periods for Buyers With Prior Short Sale – U

Fannie Mae made 2 changes that will affect home buyers in San Diego, one positive and the other negative.

  1. Before August 16th, buyers who had a 20% down payment could repurchase again after only 2 years. Buyers now have to wait 4 years instead of 2 years to purchase a home, regardless of the size of their down payment.
  2. Until August 16th, buyers with a prior short sale and a 5% down payment had to wait 7 years to qualify to repurchase a home. Now buyers only have to wait 4 years.

When can I buy again after having a short sale?

Here are the current waiting periods for a buyer who had a prior short sale and wants to use either conventional, FHA or VA financing.

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Conventional. As of August 16th, it is 4 years before a buyer can repurchase again using Conventional financing. So no matter what size the down payment is, either 40%, 20% or 5% down, a buyer with a prior short sale has to wait 4 years now across the board before they can get conventional financing again.

FHA. It is 3 years before a buyer can repurchase again using FHA financing.

*FHA TIP: The FHA has a loophole that not many people know about. If a FHA buyer did not have any late payments before their short sale, they are allowed to qualify again with no waiting period for FHA financing.

New FHA Short Sale Rule for 2014. The FHA introduced a new rule in 2013 that reduces the waiting period that buyers must wait after a bankruptcy, foreclosure or short sale before qualifying for an FHA-backed mortgage. The buyer must have experienced an “economic event” whereby their household income fell by 20% or more for a period of at least six months.

The period had previously been two years following a bankruptcy, and three years following a foreclosure or short sale. The agency has now reduced the waiting period to only ONE YEAR.

For additional information on how to qualify under this new FHA rule, check out this article HERE in the San Diego Union Tribune newspaper.

VA. It is only 2 years before a buyer can repurchase again using VA financing.

When can I buy again after having a foreclosure?

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Here are the current waiting periods for a buyer who had a prior foreclosure and wants to use either conventional, FHA or VA financing.

Conventional. It is 7 years before a buyer can repurchase again using FHA financing.

FHA. It is 3 years before a buyer can repurchase again using FHA financing. Or, see below for how a FHA buyer can qualify again after just 1 year if they experienced an economic event.

VA. It is only 2 years before a buyer can repurchase again using VA financing.

When can I buy again after having a Bankruptcy?

Here are the current waiting periods for a buyer who had a prior bankruptcy and wants to use either conventional, FHA or VA financing.


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