August 14, 2012
A reader asks, “My husband and I had a short sale in Dec. 2011, we qualify for the FHA loan with credit, income, and debt ratio. We are within the guidelines for a FHA loan. If we put the 3.5 down, do we have a waiting period because of the short sale?”
This is a frequently asked question. The typical answer is that borrowers should expect to wait three years before being able to apply for an FHA home loan following a short sale. This rule is subject to certain conditions, some of which are described below–but it’s important to note that FHA minimums are just that. Your lender may have additional requirements.
FHA loan rules do allow borrowers to apply for a new loan following a short sale if the right conditions are met. But not all FHA loan applicants will be eligible for an FHA mortgage loan following a short sale. Did you know the FHA lists a set of conditions that render a borrower unable to get loan approval for an FHA mortgage after a short sale?
According to the FHA loan rules listed in HUD 4155.1 Chapter Four Section C, “A borrower is not eligible for a new FHA-insured mortgage if he/she pursued a short sale agreement on his/her principal residence simply to
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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