If you’ve been through a foreclosure in the past few years – our hearts go out to you. This has been a tough time for so many people. If your circumstances have changed, and you find your self now ready to buy another home in NC – there’s good news! Conventional lending through Fannie Mae has much shorter waiting periods now, and the waiting period after a foreclosure could be as little as two years.
After you have a foreclosure, short sale or bankruptcy – there’s a negative impact on your credit report. So, first off, you’ll need to have your scores repaired to the point that they are above the 660 mark. Once you do that, the waiting period after a foreclosure or deed-in-lieu for Fannie Mae is based upon the amount of money you are willing to invest in your new home.
If you’ve had an Extenuating Circumstance that caused the credit “disaster” then we will need to document that. There are more lenient guidelines for folks who simply saw that homes in their neighborhood were underwater, and abandoned them – as opposed to folks who (for instance) lost their jobs. Fannie Mae considers medical illness, divorce, job loss, business closure as significant Extenuating Circumstances.
So, if you had a foreclosure, or deed-in-lieu as a result of an Extenuating Circumstance – and can wait two years from the date of transfer (so not the date that you were served the papers, the day it was actually recorded as transferring from you back to the Bank), and make a ten percent down payment. If we can not provide evidence of Extenuating Circumstance – then the waiting period is two years, as long as you make a twenty percent down payment on a home in NC.
If we can not provide Extenuating Circumstance documentation, and you only have 10% for a down payment – then you will need to wait 7 years from the event to buy another home using a Fannie Mae (Conventional) loan.
The FHA Home Loan NC program recently announced that the waiting period after a Job loss of at least six months is now only 12 months. This is a VERY document intensive program, and you will need to speak with a Housing Counselor at least 30 days prior to making loan application.
The USDA Loan waiting period after a Short Sale is 36 months from the date of transfer. I’ve looked online, and I’ve found forum comments on Zillow and Trulia that state you can get a USDA Loan with a shorter waiting period… but in North Carolina, the USDA Loan Underwriters will generally NOT approve a loan with less than 3 years from the date the title transferred. So if the Short Sale was in February of 2010 (for instance) – and we are well past the 36 month period, let’s go buy a house!
Have more questions about Waiting Period After A Foreclosure? Leave us a comment below, or call Steve and Eleanor Thorne 919 649 5058 – we’d love to help you get into a home before the USDA Loan Eligibility Maps change on . Connect with us onFacebook or Find us on Google +
How come many people (including my current lender) write that divorce is specifically NOT an extenuating circumstance as outlined by Fannie Mae?
Nick, Long Island, NY
(951) 271-2522
According to the Fannie Mae Seller Guide- originally issued on 4/1/2009 (page 427) Divorce is included as an Extenuating Circumstance? I would need more information to help you, but my suspicion is that the Lender has an overlay to the guidelines.
Hello – can you advise of a lender in Charlotte, NC that will do a conventional loan 2.5 yrs after a short sale with 20% down? Thanks very much!
Heather – please call us. We lend in Charlotte, and we’ll need a little bit more information. There are different waiting times, based upon the circumstances leading up to the short sale. You can call us at 919 649 5058. We will also need to know what type of loan the short sale was – as that can also make a difference in how long you are required to wait.