Are their loan options after a short sale?

Question

Hi,

I own a few rental properties. Ended up short selling one of the homes in AZ March of 2012. Had great credit history and score before the short sale.

Are their loans that I can still qualify for? I was told that I have to wait for a minimum of 1 year in order to qualify for another loan. Can anyone confirm? Thanks.

Thai Foo · Answer

Thanks for the info.

John Evan Miller · Answer

Here is what my latest research has revealed:

The latest Fannie Mae guidelines state that after a deed-in-lieu of foreclosure, preforeclosure sale, or short sale, there is a mandatory waiting period of two years for a loan with an 80% maximum LTV (loan-to-value ratio), or four years for a loan with a 90% LTV. If the borrower can document extenuating circumstances, the waiting period for a loan with a 90% LTV drops to two years.

FHA requires borrowers who weren't paying their mortgage when they sold their house to wait three years before they can qualify for a home loan. That time penalty may be waived in certain cases, including long-term job loss. There is no FHA time penalty for homeowners who made their house payments in the 12 months before their short sale. The size of a down payment can also shorten the waiting period.

The USDA loan program is a popular option for people who have had a short sale or foreclosure in their past because it is one of the mortgage programs with the shortest waiting periods and most flexible underwriting guidelines. The waiting period for a USDA loan after a short sale can be as little as 2 months in the right situation. Requirements include: Credit Score of 660 or higher and no late payments for the past 12 months (this can be a real clincher).

Of course, each case is unique and requirements have a sneaky way of changing.

Thai Foo · Answer

I pulled my credit on July 2012. FICO score of 698. Shows 30 days late on 1/2012 and 60 days late on 2/2013. Each one time. Short sale went through on 3/2012.

Current status shows "paid or paying as agreed".

Wayne Brooks · Answer

Pull your credit report.  Credit damage with a short sale is more related to how many late/missed payments you had as opposed to how the "transaction" was reported.