After a Foreclosure, How Long Do I Have To Wait To Buy Another Property?

Q: How long do I have to wait after a foreclosure to buy a property?

A: There is no wait to "buy a property" per se, as you can always pay with cash. However, if you need financing, the answer is "it depends." If you walked away from your last home it could take as long as seven years for you to again be eligible for a new mortgage from Fannie Mae or Freddie Mac, but recent changes after the housing market meltdown may shorten that time considerably.

Fannie Mae, Freddie Mac guidelines
If your foreclosure was the result of "Extenuating Circumstances," this waiting period could be as short as only three years for a Fannie or Freddie-backed loan, according to guidelines outlined in Fannie Mae Announcement SEL-2010-08 ("Underwriting Borrowers with a Prior Foreclosure"), but you'll need to come up with a 10 percent down payment, and your credit of course will need to be solid.

FHA guidelines
If the foreclosure was through no fault of your own -- you had a drop in income, job loss, etc. -- the FHA has instituted a "Back to Work" program where there may be a relatively short waiting period of perhaps a year.

To be eligible for this program, you'll have to been beset upon by an "economic event" which resulted in a loss of income of 20 percent or more for at least six months... and you'll have to have reestablished credit for a minimum of 12 months (foreclosure has cleared, and no other derogatory incidents over that time span).

You'll also have to take a HUD-approved housing counseling course.

The original article: After foreclosure, how long do I have to wait to buy another property? appeared on HSH.com

More money-saving and retirement tips
It's no secret that investors tend to be impatient with the market, but the best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.

Additional mortgage articles can be found on HSH.com

How much of your monthly mortgage payment will go toward principal and interest?

Here are today's current mortgage rates

Homebuyer timeline: Here's exactly what you need to do to get ready to purchase a home


Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 31, 2014, at 9:11 AM, Lender100 wrote:

    1st Alliance Lending offers the Back to Work Program. Borrowers can secure a loan 12 months after a foreclosure if they can provide documentation of hardship and meet basic criteria.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2895556, ~/Articles/ArticleHandler.aspx, 8/30/2014 6:43:14 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement