When can I can buy again after foreclosure? This has become a popular question the last few years. I thought it would be helpful to explain the required waiting periods to buy a home again after foreclosure.
How soon you can qualify to buy again after foreclosure will depend on the type of loan program you use to purchase. Why? Because FHA, VA, USDA and Conventional financing all have different waiting period guidelines.
Blog Post updated 8/16/2013 – FHA just announced they are reducing the waiting period to buy again after foreclosure by adding the Back to Work – Economic Event Extenuating Circumstance provision.
Important Tips When Buying Again After Foreclosure
Other than reading this entire blog post and making sure you call me, the most important tip I could give to someone who wants to buy again after foreclosure in California is to make sure you establish new credit, manage and maintain existing credit, and have no late payments or collections after your foreclosure.
Doing so will increase your credit score and make qualifying for a loan after foreclosure much easier. If not, it’s still possible to qualify after foreclosure, but it may require a little more work.
Also, buying again after foreclosure requires the help of an experienced and knowledgeable loan officer. You can’t expect the bank teller who was just promoted to the unlicensed loan officer position at your local bank or credit union to be able to handle this…..that’s just unrealistic.
Published Waiting Periods to Buy Again After Foreclosure
Buy Again After Foreclosure: FHA Loan Waiting Period
- Three (3) years from the date the foreclosure was completed and transferred back to the bank
- Less than two (2) years, but not less than twelve (12) months from date the foreclosure was completed and transferred back to the bank IF foreclosure was a result of acceptable extenuating circumstances.
- FYI – just because your three years is up does not mean you automatically qualify. It means you are eligible. FHA wants to see that you have proven yourself to be credit worthy again. Make sure you re-established credit and have no late pays/collections after your foreclosure.
Buy Again After Foreclosure: VA Loan Waiting Period
- Two (2) years from the date the foreclosure was completed and transferred back to the lender.
- Twelve (12) to Twenty Three (23) months from date foreclosure was completed and transferred back tot he bank if credit is re-established, reports paid as agreed; and was caused by acceptable extenuating circumstances.
Buy Again After Foreclosure: USDA Rural Waiting Period
- Three (3) years from date the foreclosure was was completed and transferred back to the lender.
- Less than three (3) years from the date the foreclosure was completed and transferred back to the lender if credit is re-established, is paid as agreed, and was a result of an acceptable extenuating circumstance.
Buy Again After Foreclosure: Conventional Loan Waiting Period
- Seven (7) years from the date the foreclosure was completed and transferred back to the lender.
- Four (4) years IF you included your mortgage in a chapter 7 bankruptcy.
- Three (3) years from the date the foreclosure was completed and transferred back to the lender with 10% down payment and extenuating circumstances.
Extenuating Circumstances to Buy Again Sooner After Foreclosure?
Yes, it is possible to buy sooner than the mandatory waiting periods. I know what you are thinking…….what is an acceptable extenuating circumstances? You can read more details about acceptable extenuating circumstance to buy after short sale, foreclosure, or bankruptcy.
Date Foreclosure Was Transferred Back to Lender (important)
You also want to pay attention to when the foreclosure was fully completed and transferred back to the lender. Meaning, when did that title (ownership) transfer record with the county. I have seen some foreclosure transactions not record that title transfer for up to 1-2 years after it was foreclosed. Not sure how to find out? Call me.
If you want to know what qualifies as an extenuating circumstance or how to buy a home again after foreclosure in California, call me direct to discuss your scenario.
Direct (951) 215-6119 or email brad(at)homeloanartist.com
Related Articles of Interest:
- Buying a Home After Bankruptcy in California
- What Interest Rate Do I Qualify For? (the truth)
- How Credit Disputes Can Get Your Loan Delayed or Denied
- The Difference Between a Mortgage Pre-qual, PreApproval, and Conditional Approval