New Changes to Mortgage Waiting Period

As one more sign of an improving real estate market at a national level, the wait times are being extended for those seeking a short sale. Fannie Mae thinks you should be able to get at least what you owe on the home in most markets across the country as long as you have done your part as a homeowner in keeping the home good repair. If not, do not expect them to want to do new business with you any time soon.

As of August 16, 2014, real estate investors who had a short sale in the past few years will now have to wait 4 years instead of 2 to get a new mortgage. The following are waiting periods to obtain certain mortgages under certain circumstances.

Conventional Loans

  • Foreclosures: 7 years from the foreclosure completion date (some applicants
    may qualify for a conventional loan only
  • 3 years after with extenuating conditions including wage earner death, illness or job loss)
  • Short Sale/Deed in Lieu-Short Sale:
    • 7 year with less than 10% down of primary residence
    • 4 years with 10% down on the purchase of a primary residence
    • 4 years with 20% down on the purchase of a primary, secondary or investment property purchase
    • 2 years with extenuating circumstances, only with 20% down
    • Bankruptcy Chapter 7: 4 years from discharge date with re-established credit and acceptable extenuating circumstances
    • Bankruptcy Chapter 13: 2 years from discharge

FHA loans

  • Foreclosures: 3 years from the foreclosure completion date and transferred back to the lender to the credit report date
  • Short Sale: 3 years from the title transfer date
  • Bankruptcy Chapter 7: 2 years from the discharge date. If a property is surrendered in chapter 7 bankruptcy, it is considered to be possible foreclosure which could increase waiting time
  • Bankruptcy Chapter 13: 1 year wait with a scheduled payment plan on liabilities factored into debt-to-income ratio and bankruptcy court approval for mortgage process or 2 years from discharge date

Department of Veterans Affairs Loans

  • Foreclosure: 2 years from foreclosure completion date and date transferred back to the lender
  • Deed in Lieu: 1-2 years with re-established credit and acceptable extenuating circumstances; 3 years without
  • Short Sale: 2 years from previous sale closed date and new owner transfer date
  • Bankruptcy Chapter 7: 2 years
  • Bankruptcy Chapter 13: 1 year with bankruptcy court approval for mortgage process; 2 years from discharge

The information listed above should be used as guides for wait time, but contact your lender or loan officer to know exact wait times for your specific situation.

Waiting Period