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.
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
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.