Loans By Kathy: Buying a home after a foreclosure or short sale

Buying a home after a foreclosure or short sale

Losing a home in a foreclosure is never the life event anyone has planned as part of their goals.  Buying a home after a foreclosure or short saleCircumstances change, events outside of our control happen.  It is a fact of life.  But after the foreclosure, how you handle your finances will greatly impact the next time you want to buy.  

For underwriting purposes, a short sale is considered the same as a foreclosure!  

Here are a few facts that you should know.  A foreclosure on your credit report will have an impact on your ability to purchase a new home.  The amount of time you have to wait will depend on the type of financing you are looking for and the amount of your down payment and the rest of your credit rating.

The first thing you should know is that a foreclosure (or any public record ie, bankruptcy, judgement, foreclosure) can negatively impact your credit score between 100-200 points.  You can plan on that foreclosure being on your credit report for the next 10 years.

Under today's guidelines, a new purchase is possible following the table below:

FHA - Must wait 3 years from the date of completion of the foreclosure

FNMA (Conventional) - Must wait 2 years with a 20% down payment

                                 Must wait 4 years with a 10% down payment

                                 Must wait 7 years with a minimal down payment


FreddieMac (Conventional) - Must wait 7 years from the date of completion

VA - Must wait 2 years from the date of completion

USDA - These will be approved by exception only.  No foreclosure activity within the previous 36 months, and supporting documentation to show this was a one time occurance beyond the borrowers control.

For further information, please feel free to contact me.



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Kathy Sheehan Senior Loan Officer






Bay Equity LLC

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11475 Great Oaks Way, Suite 350, Alpharetta, GA 30002

800.BAY.3703 Bay Equity LLC NMLS ID#76988



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The opinions and general information in this blog are soley those of Kathy Sheehan.  Specifics regarding an individual case should be discussed in detail with a loan professional.  For a confidential consultation, please feel free to contact me via phone or email.  All terms and conditions are subject to change.


Comment balloon 2 commentsKathy Sheehan • May 19 2013 05:12PM


Great information, Kathy.  I think most people know that bankruptcy and foreclosure are going to hurt the credit rating.  But it's equally important for folks to know that Life Goes On.  Someday, that person who suffered a foreclosure will be able to buy a home again.  

Posted by Tom Jansson, Chicago Area Home Inspector - InterNACHI Certified (Acuity Home Inspections) over 6 years ago

Tom, exactly the point!   Those that lost their home in 2007, 2008 and 2009 might be able to purchase now if they have planned correctly.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) over 6 years ago