Looking To Buy After A Short Sale? The Wait May Be Longer Than You Think…

The large majority of lenders follow Fannie Mae guidelines when qualifying potential borrowers for new loans. When closing on your short sale, you were given valid information that under the right conditions you could get a new loan two years after completing the deal.

Unfortunately, a couple of months ago Fannie Mae changed its guidelines so that there now is a four-year exclusion period before a buyer can qualify for a loan after a short sale. The guidelines do provide for a two-year period under extenuating circumstances, which are a sudden, drastic and prolonged drop in income that left the borrower with no other reasonable option but to default on the mortgage. In reality, it is extremely difficult to get this exception.

The good news is, not all lenders follow the Fannie Mae guidelines. Credit unions and community banks often will look past your credit score and other arbitrary criteria and evaluate your overall situation. They’ll take into account factors such as income, savings, job history and whether the short sale was an isolated event or caused by circumstances outside of your control. In all likelihood, you will need to apply at multiple lenders and jump through hoops, but I have seen many borrowers get mortgages this way.

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