Now may be your best time to buy a home
Homeowners who complete a short sale of their home have a typical two-year waiting period before they can obtain a Fannie Mae conventional loan and purchase a new home. That two-year rule is about to change. Fannie Mae recently announced that the waiting period after a short sale or foreclosure deed will increase from two years to four years.
Right now, a homeowner who went through a short sale or foreclosure (deed in lieu of foreclosure, to be specific) must wait at least two years before purchasing another home with a Fannie Mae conventional loan. Additionally, those home buyers have to put at least 20% down on the home purchase and have a clean credit record (see our blog posting on improving your credit).
People who wish to buy a home after their short sale or foreclosure must now wait four years, known as the “seasoning requirement.” This new guideline does not apply across the board, fortunately. If the homeowner can show that the short sale was due to circumstances such as loss of a job and/or wages, the waiting period might be reduced back to two years. To qualify for such consideration, the buyer needs excellent documentation of those extenuating financial circumstances. Also, the new guideline allows those people who completed a short sale/foreclosure and who wish to purchase another home, to follow standard Fannie Mae guidelines and put down as little as five percent on their new home.
If you’re one of the thousands of homeowners who went through a short sale and have waited out the two year period before buying another home, then consider buying NOW, because you have one month before the rules change. If you delay, you might have to wait another two years before finding that perfect home for you and your family.
We’re experts in short sales and conventional real estate loans, so give us a call or sit down with one of our licensed realtors to find out more about Fannie Mae’s upcoming new guidelines and see if you qualify and are ready to purchase another home.