This article covers Freddie Mac Housing Event Guidelines On Conventional Loans
- Fannie Mae and Freddie Mac are under the control and regulation of the Federal Housing Finance Agency (FHFA)
- Conventional Loans are referred to as Conforming Loans
- This is because Conventional Loans need to conform to Fannie Mae and/or Freddie Mac Mortgage Guidelines
- Conventional Loans are not insured by a government agency like HUD, USDA, and/or the VA
- Conventional Loans are private loans originated and funded by private banks and lenders
- Then why do they have to conform to Fannie/Freddie Guidelines?
- In order for Fannie/Freddie to purchase conventional loans on the secondary market, it needs to conform to their guidelines
- If the loans do not meet Fannie/Freddie Guidelines, these two GSEs will not purchase the loans
- Due to Conforming Requirements, all lenders abide by Fannie/Freddie Mac Guidelines
- There are specific waiting period requirements after foreclosure, deed in lieu of foreclosure, short sale to qualify for conventional loans
Freddie Mac Housing Event Guidelines On Conventional Loans Versus Other Loan Programs
Fannie Mae And Freddie Mac Housing Event Guidelines On Conventional Loans are tougher than government loan programs. All government and conforming loan programs have a mandatory waiting period after a housing event.
A housing event is considered the following:
- Deed In Lieu Of Foreclosure
- A Short-Sale
- A Regular Foreclosure
Fannie Mae and Freddie Mac Housing Event Guidelines On Conventional Loans differ with a deed in lieu of foreclosure and short-sale versus a standard foreclosure. We will cover Fannie Mae and Freddie Mac Housing Event Guidelines On Conventional Loans versus government loan programs in the following paragraphs.
Waiting Period Requirements After Housing Event On Government Loans
FHA, VA, and USDA Loans are government loans. It is referred to as government loans because a federal government agency insures lenders in the event the borrower defaults on their government loans. Due to this government guarantee, lenders can have lenient credit guidelines and low down payment requirements at low mortgage rates.
Here are the waiting period requirements after a housing event on government loans:
- HUD, the parent of FHA, requires a three-year waiting period after a foreclosure, deed in lieu of foreclosure, short-sale
- The Department of Veterans Affairs (The VA) requires a two-year waiting period after a foreclosure, deed in lieu of foreclosure, short-sale
- USDA requires a three-year waiting period after a foreclosure, deed in lieu of foreclosure, short-sale
Government Loans classifies a regular foreclosure the same as a deed in lieu of foreclosure. Fannie Mae and Freddie Mac Housing Event Guidelines On Conventional Loans have different waiting period requirements on a foreclosure versus a deed in lieu of foreclosure.
Freddie Mac And Freddie Mac Housing Event Guidelines On Conventional Loans And Waiting Period Requirements
Both Fannie Mae and Freddie Mac Foreclosure Guidelines On Conventional Loans are the same. Whether it is an owner-occupant property, second home, or investment home, the waiting period requirements are the same on conventional loans.
Here are the mandatory waiting period requirements to qualify on conventional loans.
- There is a four-year waiting period requirement after a deed in lieu of foreclosure and/or a short-sale to qualify for conventional loans
- There is a seven-year waiting period requirement after a standard regular foreclosure to qualify for conventional loans
If a borrower had a prior mortgage included as part of their bankruptcy, the waiting period requirement is four years after the discharged date of the bankruptcy. The date of the finalized housing event does not matter. As long as the housing event (foreclosure, deed in lieu of foreclosure, short-sale) has been finalized, lenders will just go off the discharged date of the bankruptcy. The mortgage cannot be reaffirmed after the bankruptcy.
For more information about this article and/or other mortgage-related topics, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at firstname.lastname@example.org.