What is the Waiting Period After a Short Sale?

The waiting period between concluding a short sale and buying a new home depends on the type of loan that was taken out.

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How long is the waiting period after a short sale before you can buy again? A short sale, for those who don’t know, means selling a property for less than what’s owed on it.

The answer depends on the type of loan you plan on taking out and whether it’s government-funded or insured by Fannie Mae. Fannie Mae takes longer, at least four years. There are extenuating circumstances where you can get it done in two years, but it can be very difficult to prove extenuating circumstances to an underwriter.

On a government basis, the waiting period is typically three years. Depending on your mortgage history, there are also situations where you can get it done sooner than three years.

How long you have to wait depends on what type of loan you take out.

From a credit repair standpoint, it would be wise to talk to a loan consultant like David before getting everything together. That way you’ll know what to expect down the road before you actually go through with the short sale and how long you can expect to wait afterward. It’s also important to keep the mortgage up-to-date and on time.

On a conventional basis, foreclosures usually take seven years. If you’d like to expedite that time period down to four years, there are guidelines you have to adhere to on a Fannie Mae basis, such as a higher down payment and a higher credit score. On an FHA basis, you can do it after three years.

For a full breakdown on the waiting period after a short sale, click here. 

If you have any questions regarding today’s topic, please feel free to give me a call or send me an email. I’d be happy to help you in any way I can.