Fannie Mae Waiting Period Guidelines After Housing Event
This BLOG On Fannie Mae Waiting Period Guidelines After Housing Event Was UPDATED On April 13th, 2019
Fannie Mae waiting period guidelines after housing event depends on the type of housing event. Both Freddie Mac and Fannie Mae Waiting Period Guidelines have different requirements between short sale and deed in lieu versus standard foreclosure. Both Freddie Mac and Fannie Mae waiting period guidelines after housing event is longer than government loans. The Federal Housing Finance Agency (FHFA) is the government regulatory agency that monitors Fannie Mae and Freddie Mac and conforming loans.
- Currently, Fannie Mae waiting period guidelines to qualify for a conventional loan after a short sale or deed in lieu is 4 years
- The waiting period start date is a four year from the short sale sales date reflected on the HUD-1 Settlement Statement
- The waiting after a deed in lieu of foreclosure is four years from the recorded date of the DIL and not the property surrender date
- 5% down payment is required on home purchases on conforming loans
There is a seven-year waiting period after a standard foreclosure to qualify for conventional loans.
New Fannie Mae Waiting Period Guidelines After Housing Event
The new Fannie Mae waiting period guidelines after a conventional mortgage loan borrower to qualify for a conventional loan after a short sale or deed in lieu of foreclosure is now 4 years:
- Fannie Mae changed the two-year waiting period requirement with 20% down payment after a short sale or deed in lieu of a mandatory 4 year waiting period
- There is good news for borrowers who do not have the 20% down payment and only have the 5% down payment on a home purchase
- Home Buyers no longer need a 10% down payment to qualify for a conventional loan after the 4 year waiting period requirement
- Fannie Mae will allow a home buyer to only put a 5% down payment on a home purchase
- Borrowers can qualify for a conventional mortgage loan 4 years after a short sale or deed in lieu of foreclosure
The current Fannie Mae guidelines to qualify for a conventional loan after 4 years of a short sale or deed in lieu of foreclosure used to be 10% down payment.
Other Requirements On Conforming Loans
Fannie Mae Guidelines do make an exception that a home buyer can qualify for a home purchase after 2 years after a short sale or deed in lieu of foreclosure if a home buyer with extenuating circumstances. Even though it is stated on the guidelines that extenuating circumstances such as an involuntary job loss and/or substantial loss of household income may shorten the waiting period, I have never seen a case where this happened. Do not count on going this route because the chances will be extremely tough. It will be up to the mortgage loan underwriter’s discretion and underwriters will not want to take that chance.
NON-QM Mortgages With No Waiting Period After Housing Event
Gustan Cho Associates now offers non-QM mortgages with no waiting period after housing event. Home Buyers can qualify for non-QM loans one day out of foreclosure, deed in lieu of foreclosure, short sale. 10% to 20% down payment is required. The amount of down payment depends on the borrowers’ credit scores. The great news with non-QM loans is that no private mortgage insurance is required. There are no loan limits like government and conventional loans. Non-QM Jumbo Mortgages are becoming increasingly popular. NON-QM Loans for self-employed borrowers do not require any income tax returns. 12 months bank statement deposits are averaged to determine borrower’s monthly income. Up to 50% debt to income ratios allowed.