How Can You Qualify For VA Home Loan After Short Sale In Illinois

This Article On Qualifying For VA Home Loan After Short Sale In Illinois Was Written By Julie Hayward

Qualifying For VA Home Loan After Short Sale In Illinois: Q&A with Julie Hayward, guest writer for Gustan Cho Associates Mortgage & Real Estate Information Resource Center and President and Managing Broker for Chicago based EDGE REALTY LLC

I have particular passion for and expertise in short sales. In my career as a full time Illinois real estate agent,

  • I have enjoyed handling the complexities in these sales and in helping people affected by them rebuild their lives.
  • I’m happy to share here some answers to common questions.

Question And Answers On VA Home Loan After Short Sale In Illinois

  • Question: I am behind on my mortgage and unable to catch up. What can I do?
  • Homeowners can ultimately continue not to pay and the property in Illinois will go into foreclosure.
  • The bank will serve homeowner notice and an auction is scheduled.
  • Once the property is sold at auction homeowner will have approximately 45-90 days to vacate the property in Illinois.
  • Question: I am not behind on my mortgage yet but I can’t afford to keep the property.  However, what I owe is more than the property is worth.
  • Should I consider a short sale on this property in Illinois?
  • The benefit to opting for a short sale instead of foreclosure is that doesn’t wreak as much havoc on a person’s credit and it gives the homeowner more time in their home.
  • As long as there is a home purchase real estate contract on the property, in most cases, the lender will not schedule an auction since they are working on negotiating the transaction with a current buyer.
  • This takes time, usually longer than 45-90 days, and in some cases up to two years.

Delays In The Short Sale Process In Illinois

There are several reasons for this lengthy time frame.

  • Some home buyers get tired of waiting during the approval period.
  • Other buyers think they can find a steal in buying a short sale, and when the bank comes back with a counteroffer they dislike, they walk away.
  • Sometimes the lender has a lot of inventory in a particular area and is not adequately staffed to meet demand.
  • When this is the case, the files sit on a desk until someone gets to them.
  • There are more reasons but those above are the most common reasons for delay in a short-sale transaction in Illinois.

Qualifying For Home Loan After Short Sale Versus Foreclosure

There are other benefits to your credit in going through a short sale and qualifying for a VA Home Loan After Short Sale Illinois.

  • Home buyers can buy another property in Illinois sooner if they are going to get a conventional loan.
  • Here are the qualifying factors in qualifying for a Conventional Home Loan After Short Sale:
  • There is a four year waiting period to qualify for a Conventional Loan After Short Sale and/or Deed in Lieu under Fannie Mae and Freddie Mac Guidelines
  • There is a seven year waiting period to qualify for a Conventional Loan after a foreclosure
  • There will not be a deficit judgment on a short sale versus a foreclosure where on a foreclosure the lender can sue you for the loss
  • A prior short sale has no impact on mortgage rates.
  • Things that determine your mortgage rates on Conventional Loans are credit scores, Loan To Value, and type of property the borrower is buying
  • Minimum credit scores to qualify for a Conventional Loan is 620 FICO and a short sale

You see that you can qualify for a Conventional Home Loan After Short Sale in four years where the waiting period is seven years to qualify for a Conventional Loan after a standard foreclosure.

Foreclosure could affect credit more than a short sale if there was a deficiency, especially if it is still outstanding.

  • If the homeowner can’t repay it could put homeowner into bankruptcy.
  •  Some people don’t see the difference between a foreclosure and a short sale but in the long run, it can make a big difference with Conventional Loans but not government loans like FHA, USDA, and VA Loans.

Qualifying For FHA & USDA Home Loan After Short Sale In Illinois

Home Buyers can qualify for a FHA Home Loan After Short Sale.

Here are the qualification requirements to qualify for a FHA Home Loan After Short Sale:

  • Minimum credit score of 580 FICO
  • Three year waiting period after the short sale date that is reflected on the HUD-1 Settlement Statement
  • A prior short sale has no negative effect on the mortgage rates you will get.
  • Mortgage rates are determined by credit scores and the type of property with FHA Loans
  • There is a three year waiting period to qualify for a FHA after the recorded date of a foreclosure and/or deed in lieu of foreclosure.
  • FHA treats short sales, foreclosures, and deed in lieu of foreclosures all the same
  • USDA Loans have the same three year waiting period to qualify for USDA Loan after short sale, deed in lieu, and foreclosure like FHA Loans

Qualifying For VA Home Loan After Short Sale In Illinois

VA Loans is the best mortgage loan program for any home buyer.

  • The U.S. Department of Veteran Affairs rewards our veterans who put in the required service with the opportunity to be eligible for VA Loans.
  • The Department of Veteran Affairs realize that many veterans can have less than perfect credit due to being deployed overseas, whether it is during peacetime and/or wartime so VA Guidelines After Bankruptcy, Short Sale, Foreclosure, and Deed in Lieu is much lenient than other government loan programs such as FHA and USDA.
  • Veterans can qualify for a VA Home Loan After Short Sale in Illinois as long as you meet the minimum mandatory waiting period.

Here are the VA Guidelines After Short Sale:

  • A Veteran Borrower can qualify for a VA Home Loan After Short Sale in Illinois after 2 year waiting period after the date of the short sale
  • A Veteran Borrower with a Certificate of Eligibility (COE) can qualify for a VA Home Loan After Foreclosure and/or Deed in Lieu of Foreclosure after two years after the recorded date of the foreclosure and/or deed in lieu of foreclosure
  • There are no minimum credit score requirements on VA Loans but most VA Lenders like to see at least 580 FICO credit scores from Veteran Borrowers
  • VA Loans do not have any debt to income ratio requirements as long as the borrower can get an approve/eligible per AUS ( Automated Underwriting System}
  • A prior short sale does not play any impact on mortgage interest rates.
  • Only credit scores and the type of property will determine the borrower’s mortgage rates on VA Home Loans After Short Sale in Illinois

Qualifying For VA Home Loan After Short Sale In Illinois With NO WAITING PERIOD With Non-QM Loans

Non-QM Loans are specialty mortgage loan programs which are portfolio loans and have no waiting period after short sale to qualify for home loan. Here is how NON-QM Loans work:

  • Portfolio Loans which are held by the lender and not sold to Fannie Mae and/or Freddie Mac
  • Minimum 10% down payment but 20% down payment may be required for borrowers with under 680 FICO Credit Scores
  • No waiting period after short sale, foreclosure, or deed in lieu of foreclosure with NON-QM LOANS

About The Author: Julie Hayward

Julie Hayward is the author of this article, Home Loan After Short Sale, and a guest writer for Gustan Cho Associates Mortgage & Real Estate Information Resource Center.

  • Julie Hayward is also the President and Managing Broker for Chicago headquartered EDGE REALTY LLC.
  • Julie is also the wife of prominent Chicago based Attorney Chad M. Hayward.  
  • Julie Hayward has extensive experience working at The Law Offices of Chad Hayward which is a full service law firm with a large percentage of their law practice dedicated to real estate and bankruptcy law.

Attorney Chad Hayward has dozens of law offices throughout the Chicagoland Area and in six counties of Northern Illinois: Chicago and Surrounding Suburbs of Chicago, Illinois

  • Cook County
  • Lake County
  • Will County
  • Kane County
  • Du Page County
  • Mc Henry County

Julie Hayward is an expert in short sales and is an expert negotiator dealing with lenders.

  • Julie Hayward is also a real estate consultant to the loan officers at The Gustan Cho Team.  
  • Veteran home buyers in Illinois who have any questions in short sale or are interested in buying a short sale home or  listing your home via short sale and need help in dealing with their lender, contact Julie Hayward at 312-504-9228 or email Julie at juliehayward04@gmail.com.
  • Julie is a five star realtor who is an expert in dealing with first time home buyers.
  • Julie Hayward is also the author of OPPORTUNITY KNOCKS, her first book that will be released in the upcoming weeks.

Gustan Cho and The Gustan Cho Team does not have any overlays on VA Home Loans After Short Sale In Illinois.

  • We just go off AUS Findings. Veterans who have a Certificate of Eligibility and who have questions on qualifying for Illinois VA Loans, please contact The Gustan Cho Team at 800-900-8569 or text Gustan on his cell at 262-716-8151.
  • We are available 7 days a week, evenings, weekends, and holidays via phone, text, or email us at gcho@gustancho.com.
The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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