Buying Real Estate after Foreclosure or Bankruptcy or Short Sale Underwriting guidelines

Loan Type

Credit Event

Foreclosure

Short Sale/Deed in Lieu of Foreclosure

Chapter 7

Bankruptcy

Chapter 13

Bankruptcy

Conventional

(Determined by Date  of application)

 ~ 7yrs from completion date

  ~ 3 yrs from completion date if borrower puts 10%  down.

 ~ 7  yrs if borrower puts down 10%  less

~ 4 yrs if the borrower puts down 10%

~ 2 yrs if the borrower puts  down 20%

~ *2 yrs if the borrower puts down 20%

 ~ 4 yrs from the date bankruptcy is completed

~  2yrs from the date bankruptcy is completed

 ~ 2 yrs from the date bankruptcy is completed

~ 4  yrs from the date of dismissal by a Judge

FHA

(Determined by date of Credit Approval)

 ~ 3 years from completion date  ~ Less than 2 years but not less than 12 months from completion date*

 ~ 3 years from completion date

Wait period not required if borrower is current on mortgage/debts & is not taking advantage of declining market conditions

 ~ 2 years from date bankruptcy was completed ~ Less than 2 years, but no less than 12 months the date bankruptcy was completed*

 ~ 1 year payout has elapsed & payment performance is satisfactory

 VA

(Determined by date of credit approval)

 ~ 2 years from completion date ~ Between 12-23 months from completion date*

 ~ 2 years from completion date ~ Wait period not required if borrower is current on mortgage/debts & is not taking advantage of declining market conditions

 ~ 2 years from date bankruptcy was completed ~ Between 12-23 months from the date bankruptcy was completed*

 ~ 1 year payout has elapsed & payment performance is satisfactory

 USDA

(Determined by date of credit approval)

 ~ 3 years from completion date

~ Less than 3 years *

 ~ 3 years from completion date

~ Less than 3 years from completion date*

 ~ 3 years from date bankruptcy was completed

~ Less than 3 years from date bankruptcy was completed*

 ~ 1 year from date of repayment was completed and bankruptcy completed

~ Less than 1 year*

 What events might qualify as extenuating circumstances?

 * Extenuating circumstance are temporary events that are beyond a borrower’s control, such as the loss of a job, medical bills or the death of a wage earner. Divorce and the inability to sell the house after a job relocation do not qualify. These events must be verified and documented, and they are subject to review by an underwriter.