When Are Home Buyers Eligible Again After A Damaging Credit Event

Dated: 01/08/2018

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Experiencing a damaging credit event such as a foreclosure, short sale or bankruptcy, does not mean you will not be eligible for another mortgage.  Depending on the event that took place, there are wait times before a lender can approve you for a new mortgage. If you are experiencing extenuating circumstances, the wait time may be shorter. Extenuating circumstances are temporary events that are beyond a person's control, such as a job loss or death of a wage earner. Divorce and the inability to sell the house after a job relocation do not qualify. These events must be verified and documented and are subject to review by an underwriter.


Fannie Mae Financing

  • Chapter 7 Bankruptcy- 4 years from discharge or dismissal date

  • Chapter 13 Bankruptcy- 4 years from dismissal date. 2 years from discharge date

  • Short Sale- 4 years from completion date

  • Foreclosure- 7 years from date of completion


Freddie Mac Financing 

  • Chapter 7 Bankruptcy- 4 years from discharge or dismissal date

  • Chapter 13 Bankruptcy- 4 years from dismissal date. 2 years from discharge date

  • Foreclosure- 7 years from date of completion

  • Short Sale- 4 years form completion date for short sale. 4 years for deed-in-lieu


FHA Financing

  • Chapter 7 Bankruptcy- 2 years from discharge date

  • Chapter 13 Bankruptcy- 1 year of timely payments with permission from the courts to enter into a mortgage transaction

  • Short Sale- 3 years from completion date (in some cases financing can be obtained in less than 3 years)

  • Foreclosure- 3 years from date of completion


VA Financing

  • Chapter 7 Bankruptcy- 2 years from discharge date

  • Chapter 13 Bankruptcy- 1 year of timely payments with permission from the courts to enter into a mortgage transaction

  • Short Sale- Assume the foreclosure rule of 2 years

  • Foreclosure- 2 years from discharge date


USDA

  • Chapter 7 Bankruptcy- 3 years from discharge date

  • Chapter 13 Bankruptcy- 1 year of timely payments with permission from the courts to enter into a mortgage transaction

  • Short Sale- 3 years from completion date

  • Foreclosure- 3 years from completion date

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Katherine Rubis

Kathy has lived in Plainfield for over 10 years. She is originally from Lemont and studied at the University of Illinois where she received her Bachelor's degree in both Marketing and Management. Prio....

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