dcsimg
We research, you save.
Got Questions On Rates? (855) 610-2972

New at HSH: Our 8-part, comprehensive Mortgage Prepayment Guide. Check it out!

After a foreclosure, how long do I have to wait to buy another property?

By   |  Posted in Ask The Expert

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 re-established 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.

More help from HSH.com

  • Home price recovery index: Which metros have improved the most, least?

    Have home prices in your area fully recovered from the declines suffered during the Great Recession, or are they still struggling to make it back to the peak reached before the crisis?
  • 10 metros where a home costs about $1,000/month

    HSH.com identifies 10 metro areas where you can afford the principal, interest, taxes and insurance payments on a median-priced home for only around $1,000 per month.
  • The salary you must earn to buy a home in the 50 largest metros

    Here’s how much salary you would need to earn in order to afford the median-priced home in your metro area.
  • Advantages of a FHA mortgage in 2019

    Although the cost of an FHA-backed mortgage isn't likely to get any cheaper in 2019, access to credit for homebuyers with less-than-stellar credit should improve.
  • HSH.com’s annual outlook: 2019 Mortgage and Housing Market Forecasts

    At the start of each year, HSH.com details the important factors we think are most likely to influence the mortgage and real estate markets in the coming year. Come each July, we review to see if our expectations are being met or not.