Will I ever be able to buy a home after a short sale?

If you have a foreclosure or short sale don’t despair, you will be able to own a home again. It will just take a bit of time and diligence on your part to repair your credit. Here are some of the recent lender guidelines.

As time goes on the guidelines may change with regard to the amount of down payment required, but in the near term due to the massive numbers of upside down loans, we don’t expect to see a radical change.

Different guidelines apply to those homeowners with hardships and were forced either to do a short sale, or foreclosure and those individuals that deliberately walked away from their mortgage.

What is the time frame after a short sale to buy another home?

There is a 2 to 7 year wait to purchase a home after a short sale depending on previous circumstances.
* FHA loan you will have to wait two years to apply again
* Fannie Mae allows new buyers to repurchase with 20% down payment after 2 years of either short sale or deed in lieu. If you only have a 10% down payment, the waiting period doubles to 4 years.
* Freddie Mac requires buyers to establish a good credit history for 36 months

Due to the past history of low doc, no doc loans, lenders are doing more due diligence to determine the credit worthiness of buyers and in some cases are verifying tax returns with the IRS. This is to ensure that the tax returns provided to the lender are the same ones submitted to the IRS.

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