Mortgage After Short Sale Waiting Period: How Soon Can You Repurchase a Home?
If you went through a short sale in the past and are wondering when you can qualify for a mortgage again, you’re not alone. Thousands of homeowners across the country have rebuilt their credit and successfully bought new homes after a short sale.
At Gustan Cho Associates, we specialize in helping borrowers get a mortgage after a short sale waiting period — even when other lenders say no. In this updated 2025 guide, we’ll explain how long you have to wait after a short sale, how lenders view your situation, and how you can get approved for a new mortgage faster.
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What Is a Short Sale?
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A short sale happens when someone sells their house for less than what they owe on the mortgage, and the bank agrees to it to help keep the homeowner from going into foreclosure.
For example:
If you owe $300,000 on your mortgage but your home is only worth $250,000, your lender might allow you to sell for $250,000 and forgive the $50,000 difference.
Short sales became common after the 2008 housing crash, when property values dropped nationwide. Even today, homeowners who experience job loss, divorce, or financial hardship might choose a short sale instead of foreclosure to protect their credit.
Why Lenders Require a Waiting Period After a Short Sale
When you apply for a new mortgage after a short sale, lenders consider you a higher credit risk — at least temporarily. The waiting period gives you time to:
- Re-establish credit
- Show financial stability
- Demonstrate consistent income
The good news? Once you’ve met the mortgage after short sale waiting period, many borrowers qualify for competitive loan programs with low down payments and great rates.
FHA Mortgage After Short Sale Waiting Period (3 Years)
If you plan to buy a home using an FHA loan, you can qualify 3 years after the short sale. The 3-year clock starts from the closing date listed on your HUD-1 Settlement Statement (or Closing Disclosure).
FHA Requirements After Short Sale
- Waiting period: 3 years
- Credit score: Minimum 580 for 3.5% down payment
- Credit under 580: Allowed with a 10% down payment
- Re-established credit: No late payments after the short sale
- Verification of rent: May be required for scores under 600
If you have extenuating circumstances, such as job loss or medical hardship, FHA lenders may consider exceptions on a case-by-case basis.
Tip: At Gustan Cho Associates, we’re one of the few lenders with no lender overlays. That means we follow HUD’s minimum guidelines — not stricter rules like many big banks do.
How to Improve Your Credit During the FHA Waiting Period
You don’t have to wait passively for three years. Here’s what to do during your mortgage after short sale waiting period to prepare for approval:
- Pay all bills on time — even one late payment can delay your approval.
- Keep credit card balances below 30% of your limits.
- Avoid opening too many new accounts.
- If you have little credit history, you might want to consider getting a secured credit card or a credit builder loan.
- Save for your down payment and closing costs.
Rebuilding good credit shows lenders you’ve recovered financially and are ready to handle a new mortgage responsibly.
Conventional Mortgage After Short Sale Waiting Period (4 Years)
If you plan to get a Conventional loan, backed by Fannie Mae or Freddie Mac, the standard waiting period after a short sale is 4 years.
Conventional Loan Guidelines
- Waiting period: 4 years from the short sale closing date
- Credit score minimum: 620 FICO
- Down payment: 3% for first-time buyers, 5% for others
- Private mortgage insurance (PMI): Required if under 20% down
If you had documented extenuating circumstances, such as a medical emergency or sudden job loss, the waiting period could be reduced to 2 years — but documentation must be strong.
Conventional Loan Tip
Even if you meet the 4-year waiting period, lenders will check that:
- You have re-established credit
- You have no late payments since the short sale
- Your debt-to-income ratio (DTI) is within acceptable limits
At Gustan Cho Associates, we help many borrowers who were told by other lenders that they had to wait longer. Because we don’t impose overlays, we can often approve loans as soon as you meet the agency guideline period.
VA Mortgage After Short Sale Waiting Period (2 Years)
If you’re a veteran or active-duty service member, you may qualify for a VA home loan only 2 years after a short sale.
That’s one of the shortest waiting periods available!
VA Loan Requirements After Short Sale
- Waiting period: 2 years
- No minimum credit score required by VA, but most lenders prefer 580+
- 0% down payment (100% financing)
- No private mortgage insurance (PMI)
The VA forgives past financial hardships as long as you have shown credit recovery and on-time payments since the short sale.
Quick Comparison: Mortgage Waiting Periods After Short Sale
| Loan Type | Standard Waiting Period | Extenuating Circumstances | Minimum Credit Score |
| FHA | 3 years | Case-by-case | 580 (3.5% down) |
| Conventional (Fannie/Freddie) | 4 years | 2 years | 620 |
| VA | 2 years | Possible exceptions | 580+ recommended |
| USDA | 3 years | 12–24 months | 640 preferred |
When Does the Waiting Period Start?
The waiting period clock begins on the closing date of your short sale — the date shown on your HUD-1 Settlement Statement or Closing Disclosure.
This is important because many borrowers mistakenly believe it starts when the home was listed for sale or when they moved out. Lenders will verify the actual recorded closing date in public records or the HUD documentation.
What Are “Extenuating Circumstances” That Can Shorten Waiting Periods?
Fannie Mae, Freddie Mac, FHA, and USDA all recognize that life happens. Some borrowers experience hardships beyond their control.
Examples of valid extenuating circumstances include:
- Major illness or disability
- Death of a primary wage earner
- Company downsizing or unexpected job loss
- Natural disaster impacting income or property
If you can document the event and prove it caused the short sale, lenders may reduce the mortgage after short sale waiting period.
How to Rebuild Credit and Prepare for a New Mortgage
Getting a mortgage after a short sale waiting period requires proof of financial recovery. Here’s what works best:
- Monitor your credit reports regularly.
- Dispute errors that could hurt your score.
- Pay down revolving debt like credit cards.
- Avoid applying for too many new loans.
- Keep your job and income stable for at least 2 years.
- Work with a lender early to review your file and identify improvements.
At Gustan Cho Associates, we offer credit review and prequalification services to help you strategically plan your next steps.
Why Work With Gustan Cho Associates?
Here’s why thousands of borrowers across the U.S. choose us for their mortgage after short sale:
- No lender overlays – we follow only agency guidelines (FHA, VA, USDA, Conventional).
- Manual underwriting specialists – perfect for borrowers with non-traditional income or recent credit recovery.
- Fast approvals – our 21-day fast-track program gets you to closing quickly.
- All 50 states are licensed nationwide and available 7 days a week.
Even if other lenders told you to wait longer, call us. We’ve helped countless homeowners buy again as soon as their waiting period ended.
Final Thoughts: Your Comeback Starts Now
Going through a short sale is never easy — but it’s not the end of your homeownership story. With the proper guidance and preparation, you can qualify for a new mortgage after short sale waiting period and start fresh.
At Gustan Cho Associates, we’ve helped borrowers like you rebuild their credit, qualify for financing, and move into their dream homes sooner than they thought possible.
Borrowers who need a five-star national mortgage company licensed in 50 states with no overlays and who are experts on mortgage after short sale waiting period, please contact us at 800-900-8569, text us for a faster response, or email us at alex@gustancho.com.
Your comeback story starts now — and we’ll help you every step of the way.
Frequently Asked Questions About Mortgage After Short Sale Waiting Period:
Q: How Long is the Mortgage After Short Sale Waiting Period?
A: The mortgage after short sale waiting period depends on the loan program. FHA loans require 3 years, VA loans 2 years, USDA loans 3 years, and Conventional loans 4 years. Some programs may allow shorter waiting times if you have extenuating circumstances like job loss or medical hardship.
Q: When Does the Waiting Period Start After a Short Sale?
A: The waiting period starts on the closing date shown on your HUD-1 Settlement Statement or Closing Disclosure — not the date you listed or moved out of the home. Lenders count the time from that official closing date when reviewing your mortgage after short sale waiting period.
Q: Can I Get a Mortgage Before the Waiting Period is Over?
A: Unfortunately, you can’t get a new mortgage until you’ve met the required mortgage after short sale waiting period for your loan type. You can start working on your credit and get your documents together now, so you’ll be ready to apply as soon as the waiting period ends.
Q: What’s the Fastest Way to Qualify for a Mortgage After a Short Sale?
A: The fastest way to qualify is to rebuild your credit, pay all bills on time, and keep your debt low during the mortgage after short sale waiting period. Working with a no-overlay lender like Gustan Cho Associates can also help you qualify as soon as you’re eligible.
Q: What Credit Score do I Need After a Short Sale to Buy a House?
A: You can qualify for an FHA loan with a 580 credit score (3.5% down) or as low as 500 with 10% down. For Conventional loans, the minimum score is 620. Rebuilding your credit during the mortgage after short sale waiting period is key to getting better rates.
Q: Can I Get a VA Loan After a Short Sale?
A: Yes! Veterans and active-duty service members can get a VA mortgage 2 years after a short sale. The VA has one of the quickest waiting times for getting a mortgage after a short sale, and you don’t even need a down payment or private mortgage insurance.
Q: Can I Qualify for a Conventional Loan After a Short Sale?
A: Yes. You can qualify for a Conventional mortgage 4 years after a short sale. If you had serious extenuating circumstances, Fannie Mae or Freddie Mac may allow you to apply after 2 years. Gustan Cho Associates can help you check your eligibility.
Q: Does a Short Sale Hurt My Credit as Much as a Foreclosure?
A: No, a short sale typically does less damage to your credit than a foreclosure. Most borrowers see their scores drop between 100 and 150 points, but they can recover quickly with good payment history during the mortgage after short sale waiting period.
Q: What Can I do While Preparing for a New Mortgage?
A: Use the mortgage after short sale waiting period to:
- Rebuild your credit
- Save for a down payment
- Keep steady employment and income
- Avoid new late payments or collections
- Doing these things puts you in the best position for loan approval.
Q: Who Can Help Me Get Approved for a Mortgage After a Short Sale?
A: The team at Gustan Cho Associates specializes in helping borrowers get a mortgage after short sale waiting period. We have no lender overlays and work with FHA, VA, USDA, and Conventional programs in all 50 states. Call us at 800-900-8569 to get pre-qualified today.
This blog about “Rebuild and Rise: Mortgage After Short Sale Waiting Period” was updated on October 9th, 2025.
