Buyers essentially have 3 choices these days when it comes to obtaining financing, as more than 9 out of 10 mortgages are either funded by Fannie Mae/Freddie Mac, the FHA or VA! So if a buyer is looking to purchase and needs financing, it is more than likely they will be using one of these 3.
Therefore if you know the repurchase rules that these 3 entities have in regards to when a buyer can repurchase again after suffering a short sale, foreclosure or bankruptcy, you will now be able to let your clients know exactly when they can purchase again! This will also help you focus your time and efforts accordingly too, for example, if you know someone who is 1 month away from being able to repurchase as opposed to 1 year, you will be able to focus more attention on the buyer who can purchase the earliest!
How soon can I purchase again after a Short sale?
Here are the time lines for when a buyer can purchase again after suffering a Short Sale and they are trying to obtain either Conventional, FHA or VA financing.
Conventional . It is 4 years for Conventional financing, some lenders may allow a 2 year period with compensating variables (for example if they never had a late payment before they short sold)
FHA. It is 3 years for FHA
VA. It is 2 years for VA
How soon can I purchase again after a Foreclosure?
Here are the time lines for when a buyer can purchase again after suffering a Foreclosure and they are trying to obtain either Conventional, FHA or VA financing.
Conventional . It is 7 years for Conventional financing.
FHA. It is 3 years for FHA
VA. It is 2 years for VA
How soon can I purchase again after a Bankruptcy?
Here are the time lines for when a buyer can purchase again after suffering a Bankruptcy and they are trying to obtain either Conventional, FHA or VA financing.
Conventional . For a chapter 7 Bankruptcy it is 4 years and 2 years for a chapter 13 bankruptcy for Conventional financing.
FHA. For a chapter 7 Bankruptcy it is 2 years and 1 year fora chapter 13 for FHA financing.
VA. For a chapter 7 Bankruptcy it is 2 years, and 1 year for a chapter 13 bankruptcy for VA financing.
Tell all your friends and family
As the housing crash is now over and the dust has settled, you will start to find that more and more people who did suffer a financial hardship in the past are closer to want to and be able to qualify to purchase again. For example, as the VA only needs 2 years from a short sale or a foreclosure, and the FHA only 3 years, you may find some past people who have already gone past these dates!
Check the dates if you experienced a short sale, foreclosure or bankruptcy in the past. Enough time has elapsed since your financial hardship, so you can re-purchase again.
You’ll need to rebuild your credit now
It is also important to have re-established credit again since the hardship, because even though the required time line of say 2 or 3 years may have passed for FHA financing, it is important you have started to rebuild your credit and have the required FICO scores needed too. FYI – FHA and the VA only require a 620 credit score to repurchase again.
Ask me for tips on how to rebuild your credit again so you can get in a position to repurchase ASAP! The first step is for someone to get a copy of their credit report to verify if their financial hardship or discharge is reporting correctly and to also see what their scores are. Did you know you can go to www.annualcreditreport.com to get a FREE copy of your credit report (they are allowed 1 free per year). The next step is to start rebuilding their scores, my site has 5 tips to help them improve their score.
Tomorrows Buyers
Tomorrows buyers are the people who suffered a financial hardship in the recent past! Many of these people I talk too assume it takes anywhere from 4-7 years before they can purchase again, and a lot of them are genuinely shocked when they realize that the FHA for example allows them to purchase again after just 2-3 years!
If you were unaware of the time frames necessary before you can re-purchase again, it may be your time to purchase. It’s super important to rebuild your credit too, and if you need credit tips on how to rebuild their credit you can contact me.
I hope you found this information useful. If you have any questions in regards to these programs or time lines listed above, please feel free to contact me directly at 702-326-7866 or via email at info@aundreabeach.com. I look forward to chatting soon.
