If You’ve Had A Short Sale In The Past,
You Are Still Eligible To Buy A Home,
Or Refinance Your Existing Residence
Underwriting guidelines differ for home loan applicants who’ve undergone significant credit events. The good news is that you can still obtain financing with attractive rates and terms. Here’s how it works.
Sometimes circumstances in our lives cause us to experience major credit events such as bankruptcy, foreclosure, deed-in-lieu of foreclosure, a pre-foreclosure home sale, or short sale. Lenders understand that Life Happens, and underwriting guidelines invariably provide for the treatment of applicants who’ve gone through a rough patch. Below are the rules for clients who’ve short sold a home in the past.
The general rules regarding loan approval after a short sale are set forth below:
- The borrower had good credit before the short sale.
- You’ve had good credit after the short sale.
- The short sale was caused by a one time event (or one time confluence of events)
- You’re now recovered and the circumstances that led to the short sale (huge medical expenses, job loss, excessive debt, divorce, unexpected expenses, reduction of income, etc.) no longer exist.
- Lifestyle adjustments have been made so that circumstances that led to the short sale will not recur.
Waiting Periods
Third date? Third week? Third month?
Well, none of the above. For short sales it’s more like the third year, or longer. Here’s the scoop:
Conventional Loans: Four (4) years, measured from the completion date of the short sale (i.e., the date the home’s title is transferred to the new buyer). In the presence of extenuating documentable circumstances, the waiting period is two (2) years from the completion date of the short sale.
FHA Loans: Three (3) years and established good credit since the short sale, measured from the completion date of the short sale (i.e., the date the home’s title is transferred to the new buyer). In the presence of extenuating documentable circumstances, the waiting period is one (1) year from the completion date of the short sale.
VA Loans: Two (2) years, measured from the completion date of the short sale (i.e., the date the home’s title is transferred to the new buyer).
USDA Loans: Three (3) years, measured from the completion date of the short sale (i.e., the date the home’s title is transferred to the new buyer).
Specialty Loan Products featured by SLG: No short sale waiting period.
To find out more about short sale waiting periods, please contact us today.
Call 855.SLG.FUND (855.754.3863) or inquire below.
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