Bankruptcy Foreclosure & Short Sale Waiting Periods

CONVENTIONAL

Derogatory ItemWaiting Periods
ForeclosureHome was given back to the bank - No owner participation
  • 7 years from the date foreclosure completed and transferred back to bank if they had NO extenuating circumstances.
  • 3 years from date foreclosure completed and transferred back to bank with acceptable extenuating circumstances AND 10% down payment. Primary home purchase and rate/term refinance only. Non-owner and second homes not allowed
Short Sale
Deed in Lieu of Foreclosure
Short Sale: Home sold but sales price didn't cover amount owed
Deed in Lieu: Home returned to lender in exchange for cancelling loan
  • 7 years from date sale closed and transferred to a new owner or transferred back to bank for less than 10% down payment
  • 4 years from date sale closed and transferred to a new owner or transferred back to bank with 10% down payment
  • 2 years from date sale closed and transferred to a new owner or transferred back to bank with 20% down payment
  • 2 years from date sale closed and transferred to a new owner or transferred back to bank possible with acceptable extenuating circumstances AND 10% down payment
Bankruptcy Chapter 7Debts are discharged through BK, client does not pay any debts owing
  • 4 years from discharge date
  • 2 years from discharge date possible with acceptable extenuating circumstances
Bankruptcy Chapter 13Debts are paid back on a monthly scheduled payment plan by client
  • 2 years from discharged date
  • 4 years from dismissal date

FHA

Derogatory ItemWaiting Periods
Foreclosure
Deed in Lieu of Foreclosure
Foreclosure: Home was given back to the bank - No owner participation
Deed in Lieu: Home returned to lender in exchange for cancelling loan
  • 3 years from date foreclosure completed and transferred back to bank
  • Less than 2 years, but not less than 12 months from date foreclosure completed and transferred back to bank may be acceptable if the result of acceptable extenuating circumstances
Short SaleHome sold but sales price didn't cover amount owed
  • 3 years from date sale closed and transferred to a new owner
  • No waiting period if borrower had no late payments on any mortgages and consumer debts within the 12 month period preceding the short sale AND they are not taking advantage of declining market conditions
Bankruptcy Chapter 7Debts are discharged through BK, client does not pay any debts owing
  • 2 years from date of discharge with re-established credit paid as agreed or no new credit obligations incurred
  • Less than 2 years, but not less than 12 months from date of discharge may be acceptable if the bankruptcy was caused by acceptable extenuating circumstances and borrower has since exhibited a documented ability to manage finacnial affairs in a responsible manner
Bankruptcy Chapter 13Debts are paid back on a monthly scheduled payment plan by client
  • 1 year payout period under bankruptcy has elapsed and the borrower's payment performance has been satisfactory and all required payments made on time

VA

Derogatory ItemWaiting Periods
Foreclosure
Deed in Lieu of Foreclosure
Foreclosure: Home was given back to the bank - No owner participation
Deed in Lieu: Home returned to lender in exchange for cancelling loan
  • 2 years from date foreclosure completed and transferred back to bank
  • 12-23 months from date foreclosure completed and transferred back to bank if credit re-established and paid as agreed and was caused by acceptable extenuating circumstances
Short SaleHome sold but sales price didn't cover amount owed
  • 2 years from date sale closed and transferred to a new owner
  • No waiting period if borrower had no late payments on any mortgages and consumer debts within the 12 month period preceding the short sale AND they are not taking advantage of declining market conditions
Bankruptcy Chapter 7Debts are discharged through BK, client does not pay any debts owing
  • 2 years from date of discharge
  • 12-23 months from date of discharge if credit re-established and paid as agreed and was caused by acceptable extenuating circumstances
Bankruptcy Chapter 13Debts are paid back on a monthly scheduled payment plan by client
  • 1 year payout period under bankruptcy has elapsed and the borrower's payment performance has been satisfactory and all required payments made on time

USDA

Derogatory ItemWaiting Periods
Foreclosure
Deed in Lieu of Foreclosure
Short Sale
Foreclosure: Home was given back to the bank - No owner participation
Deed in Lieu: Home returned to lender in exchange for cancelling loan
Short Sale: Home sold but sales price didn't cover amount owed
  • 3 years from date the foreclosure was completed and transferred back to bank
  • Less than 3 years from date the foreclosure was completed and transferred back to bank may be considered with acceptable extenuating circumstances
Bankruptcy Chapter 7Debts are discharged through BK, client does not pay any debts owing
  • 3 years from date of discharge
  • Less than 3 years from the date of discharge may be considered with acceptable extenuating circumstances
Bankruptcy Chapter 13Debts are paid back on a monthly scheduled payment plan by client
  • 1 year from the date repayment was completed and bankruptcy discharged
  • Less than 1 year from the date of discharge may be considered with acceptable extenuating circumstances