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How Long Buyers Must Wait before Obtaining Financing After Bankruptcy, Foreclosure, and Short Sales

The facts about how long buyers must wait before obtaining financing following bankruptcy, foreclosure, or a short sale:

LegendFM = Financial ManagementEC = Extenuating Circumstances

Conventional FHLMC (Freddie Mac)

  1. BK – Ch. 7 or 11:  4 yrs (FM) or 2 yrs (EC)

  2. BK – Ch. 13:  2 yrs from discharge or 4 yrs from dismissal (FM); 2 yrs from discharge or dismissal (EC)

  3. Multiple BK – 5 yrs

  4. Foreclosure:  7 yrs (FM) or 3 yrs (EC)

  5. Deed in Lieu of Foreclosure or Short Sale:  4 yrs (FM) or 2 yrs (EC)

FNMA Conforming (Fannie May)

  1. BK – Ch. 7 or 11:  4 yrs (FM) or 2 yrs (EC)

  2. BK – Ch. 13:  2 yrs from discharge or 4 yrs from dismissal (FM); 2 yrs from discharge or dismissal (EC)

  3. Foreclosure:  7 yrs (FM) or 3 yrs (EC)

  4. Deed in Lieu of Foreclosure or Short Sale:  4 yrs for LTV 80.01-90% (FM) or 2 yrs (EC)

Conventional Non-Conforming

  1. BK Ch 7, 11, or 13:  5 yrs w/ re-establishment of acceptable credit

  2. Foreclosure, Deed in Lieu of Foreclosure:  4 yrs w/ re-establishment of acceptable credit

  3. Short Sale:  4 yrs, w/ re-establishment of acceptable credit, plus loan paid off was current & no delinquencies in past 12 months.

American Dream

  1. BK Ch 7 or 11:  2 yrs

  2. BK Ch 13:  1 yr

  3. Multiple Bankruptcies:  60 mos

  4. Foreclosure:  84 mos (FM), or 36 mos (EC)

  5. Deed in Lieu of Foreclosure or Short Sale:  48 mos (FM), or 24 mos (EC)

FHA

  1. BK Ch 7:  2 yrs w/ re-established credit or chose not to incur new debt (FM), or 12 mos-2 yrs w/ documentation (EC)

  2. BK Ch 13:  need 1 yr into payout period, satisfactory payment history, & court permission

  3. Foreclosure, Deed in Lieu, Short Sale:  3 yrs w/ re-established credit (FM), or documentation of EC w/ re-established credit

Portfolio

  1. BK, Foreclosure, Deed in Lieu, Short Sale:  7 years

  2. Exceptions- Short Sale 4 years, BK CH 13- 5 years due to extenuating circumstances

Important: You should check with legal or accounting professionals to examine your individual situation in detail.

Compliments of Brian Campbell of U.S. BankPhone: 503-309-9800brian.campbell@usbank.com210 E. Main StreetHillsboro, OR 97123

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