Home Loan After Multiple Foreclosures Mortgage Guidelines

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Home Loan After Multiple Foreclosures Mortgage Guidelines

This BLOG On Home Loan After Multiple Foreclosures Mortgage Guidelines Was Written By Michael Gracz of Gustan Cho Associates

Home buyers can qualify for a home loan after foreclosure.

  • There are waiting periods after foreclosure that are mandatory for every mortgage loan program
  • For example, there is a mandatory waiting period of three years from the recorded date of the foreclosure to qualify for a FHA Loan
  • Waiting period after a deed in lieu of foreclosure and short sale is three years after the recorded date of the deed in lieu of foreclosure to qualify for FHA and USDA Loans
  • Three years from the date of the short sale which is reflected on the HUD Settlement Statement to qualify for FHA and USDA Loans
  • There is a two year waiting period to qualify for VA Home Loans after the following per VA Guidelines:
    • Chapter 7 Bankruptcy discharged date
    • Recorded date of foreclosure and/or deed in lieu of foreclosure
    • Date of short sale
  • There is a mandatory waiting period of seven years from the recorded date of the foreclosure to qualify for conventional loans
  • There is a four year waiting period after a deed in lieu of foreclosure and short sale to qualify for conforming loans
  • Most folks have one foreclosure, short sale, deed in lieu of foreclosure
  • But how about those who owned multiple properties and are now trying to qualify for home loan after multiple foreclosures? 

Home buyers can qualify for home loan after multiple foreclosures. We will cover some case scenarios in the following paragraphs on this article.

Lending Guidelines In Qualifying For Home Loan After Multiple Foreclosures

Prior to the 2008 Real Estate Meltdown, many folks owned more than one property.

  • Many hard working Americans who had no experience in real estate started to invest in real estate and many had multiple homes
  • They purchased homes, rehabbed them, and flipped them for handsome profits
  • Others purchased multiple homes, mortgaged them, and rented them
  • Police officers, teachers, fire fighters, mortgage brokers, real estate agents, plumbers, electricians, cashiers, small business owners, blue collar workers, white collar workers, doctors, lawyers, dentists, and military personnel all became real estate investors and they all made money
  • Many folks in these professions made so much money in real estate that they ended up quitting their main jobs and became professional real estate investors
  • They thought that the real estate boom will last forever
  • For almost ten years, real estate prices kept on going up year after year after year with no sign of turning back
  • Real estate values appreciated so much every year and many property owners refinanced them every year or every other year
  • They did a cash out refinance, and used the cash proceeds from the cash out refinance to purchase more homes
  • Many property owners owned more than a dozen properties
  • Real estate financing was extremely easy
  • There were many mortgage loan programs where no income verification was required
  • Many real estate investors can purchase homes with no money down
  • Others purchase homes not only with no money down but got back cash at closing
  • Then 2008 rolls around and the real estate market crashed like never in the history of the United States

Qualifying For FHA Home Loan After Multiple Foreclosures

Home buyers can qualify for FHA Home Loan After Multiple Foreclosures.

  • They can qualify for a FHA Loan three years after the latest recorded foreclosure
  • By this is the date the last property they owned was foreclosed on
  • The deed of the home was transferred out of their name into the name of the lender
  • Or the name of the new home buyer or the date of the Sheriff’s Sale
  • Re-established credit and no late payments after the latest foreclosure is required

Qualifying For Conventional Home Loan After Multiple Foreclosures

Borrowers with multiple foreclosures can qualify for a home loan after multiple foreclosures seven years after their latest recorded foreclosure:

  • This is where the deed of the property was transferred out of homeowners name into the name of the mortgage lender or new home buyer
  • Or to the name of the new home buyer or the date of the Sheriff’s Sale
  • Waiting period after foreclosure to qualify for a conventional loan is seven years from the recorded date of the foreclosure
  • There is a four year waiting period after a short sale to qualify for a conventional loan
  • There is a four year waiting period after a short sale to qualify for a conventional loan

No Waiting Period After Housing Event And Bankruptcy With Non-QM Loans

Home buyers who did not meet the mandatory waiting period after a housing event and/or bankruptcy can now qualify for non-qm loans offered by Michael Gracz of Gustan Cho Associates.

  • A housing event is a foreclosure, deed in lieu of foreclosure, short sale
  • There is no waiting period after housing event and/or bankruptcy discharged date with non-qm loans
  • 10% to 20% down payment is required
  • There is no private mortgage insurance required on all non-qm loans
  • There is no loan limit caps on non-qm loans
  • Mortgage rates on non-qm loans depends on borrowers credit scores and the amount of down payment they can put down
  • The amount of down payment on non-qm loans is dependent on borrowers credit scores

About The Author On Home Loan After Multiple Foreclosures

Michael Gracz is the author of this blog on Home Loan After Multiple Foreclosures and contributing writer for Gustan Cho Associates Mortgage News. Mike Gracz is also the Deputy Chief Managing Editor for Gustan Cho Associates. Mike is an expert on government and conventional loans and heads the non-qm and alternative financing division of Gustan Cho Associates Mortgage Group. Michael Gracz has a national five star reputation due to his no overlays on government and conventional loans and being one of the top non-qm lenders in the country. Mike is available 7 days a week, evenings, weekends, and holidays. Free free to call or text Michael Gracz at 630-659-7644 or email Michael at mgracz@gustancho.com.

2 Comments
  1. Bruce Williams says

    If a person had a foreclosure back in 2010, another one in 2014, and a third foreclosure in January 2015, this person can qualify for a FHA loan in January 2018. This is because HUD requirements is a 3 year waiting period after the recorded date of foreclosure to qualify for FHA loans. The prior foreclosures do not matter.

    1. Gustan Cho, NMLS 873293 says

      That is correct. The waiting period goes by the most recent recorded foreclosure on cases involving multiple foreclosures.

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