Can I buy a house 1 year after a short sale?

Yes under the FHA Second Chance Program. The program allows a home buyer to repurchase just 12 months after a foreclosure or short sale. In order to qualify, there must be a documentable loss of income for a minimum of six months and/or supporting documentation showing a one time unforeseen economic hardship that resulted in loss of income for a minimum of half a year. This is a non-negotiable aspect of the program. In other words, without supporting documentation such as an employer letter, lower income and pay stubs and/or lower income on tax returns, most buyers will not qualify.

If documentation cannot be provided that supports the loss of income claim, 20% down is required to purchase a home again for a primary residence two years in a short sale for a conventional mortgage loan without monthly mortgage insurance. Otherwise, an FHA Loan will allow for the regular three-year window outside of a foreclosure or short sale.

How to document the short sale or foreclosure when it comes time to get a mortgage

If the previous property was a foreclosure, the new mortgage lender putting together the loan will need a copy of the trustee’s deed stating specifically when the foreclosure was recorded.

If the previous property was a short sale, two things would be helpful to have, the final settlement statement also called the HUD one that you would’ve received from the title company handling the sale and a copy of the grant deed-deeding the property from you to the old buyers. This document will also be in the title papers provided by the title company at commencement of the previous sale.

Lending Top: A quality lender can access these  documents from their preferred escrow officer.

Having a hard time determining whether not you will qualify to buy a house again? Give Scott a call at 707-217-4000 or send him an e-mail Scott.Sheldon@nafinc.com. He can walk you through the nuts and bolts of qualifying and make sure your new loan will successfully close escrow.

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