August 13th, 2014 11:27 AM by Glenn Gordon
The clock is ticking for homeowners with previous short sales to get back in the game
If you have had a short sale during our recent economic downturn, you will be able to buy a house again. You just might have to wait a little longer.
The previous waiting period for a Fannie Mae-backed loan was two years, but beginning on August 18, 2014, that guideline will change to a four-year waiting period. This will apply to homeowners who had a recent short sale or deed-in-lieu of foreclosure.
Other changes and restrictions to Fannie Mae’s guidelines include the removal of the loan-to-value ratio and a required 20% down payment on the loan in order to qualify for a Fannie Mae-backed loan.
However, there are some ways you can still qualify:
If it has been at least two years, you can still get your loan application in by Friday, August 15th and be grandfathered in to the existing program.
If you can prove extenuating circumstances, you may still have to wait only two years.
You can try to qualify through other loan programs, but may pay a little higher interest rate.
You can apply for a FHA-backed loan after three years, or only one year proving extenuating circumstances caused the short sale.
What qualifies as “Extenuating Circumstances”?
Thousands of people bought homes during the housing boom using creative financing options, but when the market crashed, they found themselves extremely underwater and unable to pay their mortgage. Many of these homeowners opted for a short sale to avoid having a foreclosure.
However, some homeowners lost their homes as a result of a job loss, illness, divorce or other significant event. If these homeowners can prove that these circumstances were beyond their control, have re-established their credit and have gotten back on their feet, they may be an exception to these rules.
If you are ready to buy again after your recent short sale, call us right away to see if you will qualify. We can get the application process started by Friday, August 15th and lock you in to the existing guidelines. After that period, you may still qualify. We will look for options that will work for you. Because we don’t just sell mortgages...We provide mortgage solutions.