After Foreclosure, Home Buyers Are Back!

That was the headline from a WSJ.com article and they are 100% correct. Some refer to these buyers as Boomerang Buyers.

FHA requires a waiting period of 3 years for both a foreclosure and short sale. There are ways around the 3 years if you show a 20% decrease in your income for 6 months, if you can show extenuating circumstances, or if you short sold the property but never fell behind on the mortgage.

On a Conventional loan the requirement is 4 years for a short sale or 2 years if you can document extenuating circumstances. If you had a foreclosure it’s a 7 year waiting period however if the mortgage was included in the bankruptcy you can get away with the 2 years from the discharge date on a Chapter 13 bankruptcy or 4 years for a Chapter 7.

VA has a 2 year waiting period.