Think you can’t qualify for a loan because of a short sale as recent as 2011? Think again, you actually could qualify. How about a 2011 Chapter 7 bankruptcy? Yep, you can still potentially qualify. For anyone who had a recent short sale, even foreclosure or bankruptcy, read on….

Lending rules in place:

Short sale- a potential borrower can purchase a home again two years from the date of short sale with 20% down and at least a 620 credit score. They will need to provide the final closing statement from the previous property and pass Fannie Mae and/or Freddie Mac’s automated underwriting engine every mortgage lender has access to.

So if you’re short sale was completed in 2011, call it January 1, 2011 that would make you eligible to purchase a home again with 20% down or 20% gift January 1, 2013. Consequently, if you’re short sale was September 2011, then September 2013 would make you eligible to repurchase a home again.

 Foreclosure-a potential borrower can purchase a home again three years after a foreclosure, this means if you had  had a foreclosure in 2010 you can actually purchase a house three years from the date of that occurrence with as little as 3.5% down.

Bankruptcy-most common form Chapter 7, two years of a chapter 7 bankruptcy you can purchase a house again with 3.5% down. So if your Chapter 7 bankruptcy occurred in January 2011,  you’d be eligible to purchase again in January 2013.

If your potential loan scenario  contains a chapter 7 bankruptcy, a foreclosure or a short sale, that does not automatically preclude you from purchasing a house or refinancing a home with today’s low market rates. Supporting  financial documentation will need to be provided such as the full chapter 7 court approved bankruptcy papers all articles all schedules, final closing statement from a short sale transaction and/or the deed from the previous foreclosure.

Have a a unique credit question and are trying to get a mortgage? Start today by contacting Scott.Sheldon@nafinc.com.