AUTHOR: Ryan De Young

Timing is everything! And now that the housing market is bustling, there are many people who may want to buy a new home, but aren’t sure if a bankruptcy, foreclosure, or short sale will affect their ability to do so.  So here is a quick guide on when you can purchase a new home after you have had one of these events occur.

Conventional

• Chapter 7 Bankruptcy:
  • The time elapsed must be 4 years or greater from either the discharge or dismissal date.
• Chapter 13 Bankruptcy:
  • The time elapsed must be 2 years or greater from the discharge date OR 4 years or greater from the dismissal date.
• Foreclosure:
  • The time elapsed must be 7 years or greater regardless of occupancy
• Short Sales:
  • The time elapsed must be a minimum of 4 years

FHA

• Chapter 7 Bankruptcy:
  • The time elapsed must be 2 years since the discharge date and when good credit has been established.
• Chapter 13 Bankruptcy:
  • The time elapsed must be 2 years since the discharge, and the AUS risk decision received is an “Accept,” the loan does not need manual downgrading and bankruptcy documentation is not required.
• Foreclosure/Short Sale:
  • The time elapsed must be greater than 3 years prior to the date of application, and the risk decision received is an “accept” or “approve”.

VA

• Short Sale:
  • Eligible if not in default at time of sale.  If in default at time of sale – 3 year seasoning required.
• Chapter 13 Bankruptcy:
  • No seasoning if discharged.  Not discharged – 12 month seasoning with pay history/court permission.
• Short Sale:
  • Eligible if not in default at time of sale.  If in default at time of sale – 3 year seasoning required.

Please contact DeYoung Mortgage for any additional investor requirements.

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