The Road to Recovery


Road to RecoveryThe question comes up frequently, “How long do I need to wait after a foreclosure or a short sale to buy a home again with traditional home loan financing”? I often find that they’re surprised by the reply. I think people can either be fearful of the answer, or can be embarrassed to discuss what happened in the past. It is hard to dig up things from the past, but sometimes it is the only way to move forward.

My team and I are here to help those who have experienced setbacks in life and guide them through their second chance scenarios. Life events that may have caused a foreclosure or short sale are most generally one time occurrences. Understanding how to move forward, and the timing involved, are important things to know. Here are a few quick tips that may help a family know if now is the time to get started again, and the standard waiting time frames after the foreclosure or short sale dates:

  • FHA financing requires a 3 year passage of time between the completion date of the Foreclosure, Deed in Lieu, or short sale to the date of the new FHA case number assignment date. There can be exceptions to the rule for extenuating circumstances that were outside the borrower’s control.
  • VA Financing generally requires a 2 year passage of time after the completion of the Foreclosure, Deed in Lieu, or short sale. Shorter time frames can be allowed with proof of timely payments on subsequent credit obligations for at least 12 months.
  • Conventional loans require a 7 year passage of time after the completion date of the sheriff’s sale. Short sales have a 4 year passage of time requirement.
  • USDA or Rural Development loans require a 3 year passage of time from the completion date of the Foreclosure or Deed-in-Lieu. Short sales also follow a three year time frame for the date of the sale, with exceptions given for timely payments on all credit obligations for the 12 month period preceding the short sale.

The above are simply guidelines for you to follow. Each person will have a financial picture and corresponding options that are unique to them. I will be happy to analyze the situation and lay out the steps needed to put them back into home ownership. Don’t exclude yourself because of fear of the unknown. The time is now. Give me a call at 952-851-8962 to get started back on the road to home ownership.  – Randy Cullen, NMLS #326128


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