Mortgage Waiting Periods For Bankruptcies and Foreclosures

What Is The Waiting Period After A Short Sale Due To Bankruptcy Or Foreclosure?

There’s a common misconception; that after a short sale, bankruptcy or foreclosure, you’ll have to wait 7 years before you can get a new mortgage. Here’s some good news regarding the waiting periods:

  • FHA has NO waiting period on a short sale, if you are current at the time of the sale, and on time for the past 12 months.
  • If you were in default at time of the short sale, FHA will make you wait 3 years.

What Is The Shortest Waiting Period For Bankruptcy?

The shortest waiting periods for Bankruptcy is on chapter 13. Where FHA and VA only 1 year waiting period! They will require 2 years for chapter 7 or 11.

How Do Fannie Mae And Freddie Mac Approach Bankruptcy?

Fannie Mae and Freddie Mac are more conservative and will either require more money down or make you wait up to 7 years although with specific extenuating circumstances, they too will shorten the wait periods to 2 years.

What About Extenuating Circumstances Leading To Foreclosure?

All agencies have extra rules to allow for extenuating circumstances. So, if you planned the foreclosure, the agencies can require that you wait 7 years regardless. BUT if you had a serious illness you might be able to shorten the waiting period to 1 year. There is hope at the end of the tunnel and it can come a lot sooner than you thought.