How Long After a Foreclosure Can I Finance Another Home?

If you are like many people over the last couple of years, you may have found yourself in dire financial straits and unable to keep your home.  But now you have picked yourself up, dusted yourself off and thought about diving into the Anchorage real estate pool again.  But, are you wondering how long after a foreclosure do you have to wait before you will be able to finance another home?  I've got the answers for you right here.

Typically, if you have your home foreclosured on or handed over to the lender under deed-in-lieu of foreclosure, you won't be eligible for FHA financing for three years after your previous home was foreclosed on.  If you filed for Chapter 7 Bankruptcy (where you may keep some property but are liquidating your debts), you won't be eligible to apply for a new FHA loan for two years.  However, if you filed for Chapter 13 Bankruptcy (the reorganization of debt), you may only have to wait as little as 12 months.

It's important to remember, however, that these rules are not written in stone.  Some lenders may allow you to apply for an FHA loan less than three years after a foreclosure if the previous home was lost due to extenuating circumstances, such as an extended illness or even death of a spouse.  On the other hand, some lenders may follow even stricter guidelines and refuse a loan even after three years have passed since the foreclosure.  That is why it is important to speak with your local lenders before you apply for an FHA loan to see what their stance is on previous foreclosures and financing your next Anchorage home.  Of course, you can always contact me and I'll be happy to help you find the answers you need!

Pauline Hofseth, your Anchorage real estate expert