Many financially distressed Middle Tennessee homeowners who are facing foreclosure and considering a deed-in-lieu of foreclosure, a Tennessee short sale or even bankruptcy have asked me how long they will need to wait to buy a home after foreclosure, short sale or bankruptcy.
Waiting Periods to Buy a Home After Foreclosure, Deed-in-Lieu, Short Sale and Bankruptcy
Since the answers are found in multiple places, I decided to compile a complete list and cross reference them for accuracy. In order to accomplish that task and compile the Waiting Periods to Buy a Home After Foreclosure, Deed-in-Lieu, Short Sale and Bankruptcy below, I utilized the following sources:
- HUD 4155.1 Mortgage Credit Analysis for Mortgage Insurance
- VA CREDIT ISSUES: Credit Problems and VA Loans
- Fannie Mae DU User’s Guide for VA Loans 5-2008
- Fannie Mae Selling Guide 1-27-2011
- Freddie Mac Underwriting Reminders for Loan Prospector: Caution Risk Class Mortgages
- Effects of a Loan Modification, Short Sale, Foreclosure, Bankruptcy and Walking Away/Doing Nothing on Credit Scores
- Waiting Periods on Bankruptcy, Foreclosure and Short Sales
- Buying A Home After Foreclosure or Short Sale | Wait Time To Buy Again After Short Sale
Waiting Period for a Federal Housing Administration (FHA) Insured Loan
- Minimum Waiting Period Under The New FHA Back To Work Program – Under the new FHA “Back to Work – Extenuating Circumstances” Program, if you have had a foreclosure, short sale, deed-in-lieu of foreclosure, or have filed bankruptcy you may qualify for a new home loan if you are back to work and can document the extenuating circumstances. You must have a 12 month record of on-time rental housing payments with no delinquencies and not have been 30 days late on more than one non-housing loan payment. If there are still any open collection or judgment accounts, then those will have to factored into your debt calculations for the new loan.
- Foreclosure – 3 years (can be reduced if there are “extenuating circumstances”).
- Deed-in Lieu – 3 years (can be reduced if there are “extenuating circumstances”).
- Short Sale – 3 years (can be reduced if there are “extenuating circumstances”).
- Bankruptcy (Chapter 7) – 2 years from bankruptcy discharge (can be as low as 1 year if there are “extenuating circumstances”).
- Bankruptcy (Chapter 13) – 2 years from bankruptcy discharge for automatic approval, but can be as low as 1 year after first bankruptcy payments made if all payments were made on time as agreed and the bankruptcy trustee approves the borrower’s new mortgage loan.
Waiting Period for a Veterans Administration (VA) Guaranteed Loan
- Foreclosure – 2 years.
- Deed-in Lieu – 2 years.
- Short Sale – 2 years.
- Bankruptcy (Chapter 7 or 11) – 2 years from bankruptcy discharge (can be reduced to 1 year if there are “extenuating circumstances” and credit has been re-established).
- Bankruptcy (Chapter 13) – 2 years from bankruptcy discharge for automatic approval, but can be as low as 1 year after first bankruptcy payments made if the borrower made all payments on time as agreed and receives permission from the bankruptcy court.
Waiting Period for a Conventional Conforming Mortgage Loan (meets Fannie Mae (FNMA) and Freddie Mac (FHLMC) Loan Purchasing Guidelines)
- Foreclosure – 7 years for full eligibility with Fannie Mae and Freddie Mac. If there are “extenuating circumstances” the waiting period with Fannie Mae can be reduced to 3 years with partial eligibility for loan-to-value (LTV) of up to 90%. The “extenuating circumstances” the waiting period with Freddie Mac is 3 years.
- Deed-in Lieu – NEW = 2 years from completion of a DIL. OLD = 7 years from the date sale closed and transferred to the new owner or foreclosure completed and property transferred back to the bank with less than 10% Down Payment. 4 years from the date sale closed and transferred to the new owner or foreclosure completed and property transferred back to the bank with 10% Down Payment. 2 years from the date sale closed and transferred to the new owner or foreclosure completed and property transferred back to the bank with 20% Down Payment. 2 years from the date sale closed and transferred to the new owner or foreclosure completed and property transferred back to the bank with 10% Down Payment and acceptable “extenuating circumstances”.
- Short Sale – NEW = 2 years from completion of a short sale.
- Bankruptcy (Chapter 7 or 11) – NEW = 2 years from date of bankruptcy discharge. OLD = 4 years from date of bankruptcy discharge. 2 years from the date of bankruptcy discharge may be possible with acceptable “extenuating circumstances”.
- Bankruptcy (Chapter 13) – 2 years from date of bankruptcy discharge. 4 years from date of bankruptcy dismissal.
Waiting Period for a Conventional Non-Conforming (JUMBO loans which exceed the maximum loan amount which will be purchased by Fannie Mae or Freddie Mac)
- Foreclosure – 7 years
- Deed-in-Lieu – 7 years
- Short Sale – 7 years
- Bankruptcy – 7 years
A Tennessee Short Sale is Usually Your Best Option
As you can see by the information above and the lesser credit damage caused by a short sale (versus a deed-in-lieu, foreclosure or bankruptcy), a short sale is generally the best option for a financially distressed homeowner who is facing foreclosure or who cannot afford to pay their mortgage.
You should contact a foreclosure defense and/or bankruptcy attorney, a Tennessee short sale real estate specialist like myself, or a legitimate mortgage loan counselor to evaluate all of your options.
Don’t Let the Bank Foreclose on You – Get Tennessee Short Sale Help and Foreclosure Assistance
Please just do not let the bank foreclose on you without trying to prevent foreclosure. If you have a mortgage loan with Wells Fargo, Bank of America (BAC Home Loans or Countrywide Mortgage), CitiMortgage, Chase (JPMorgan Chase), America’s Servicing Company (ASC), GMAC, a Fannie Mae owned loan, a Freddie Mac owned loan, an FHA insured mortgage loan, a THDA mortgage loan, or any type mortgage loan, and you have missed mortgage payments, or will miss mortgage payments and live in the Nashville Tennessee area (Nashville, Brentwood, Franklin, Nolensville, Spring Hill, Thompson’s Station, Murfreesboro, Smyrna, LaVergne, Antioch, Columbia, Mt. Juliet, Springfield, Gallatin, Hermitage and Hendersonville), please contact Nashville Tennessee Short Sales and Foreclosures Expert for a free no obligation consultation to discuss your foreclosure prevention options including a short sale or short sales (if you have multiple properties).
Middle Tennessee Real Estate – Middle Tennessee Short Sales, Foreclosures, Short Sale Help and Foreclosure Assistance
I help people buy and sell real estate in Middle Tennessee and specialize in Middle Tennessee short sales, foreclosures, short sale help and foreclosure assistance (stop mortgage foreclosure).
Whether you are buying or selling real estate in middle Tennessee , my goal is to provide expert advice and exceptionally responsive customer service utilizing the best business practices, technology and systems available. Call or send me an email so we can discuss how I can best serve your Middle Tennessee real estate needs!
Jim McCormack (Middle Tennessee Short Sales and Foreclosure Help Expert)
Direct – Preferred and text: 615.796.6898
