Waiting Period After Short Sale And Deed In Lieu:  Conventional Loan

Fannie Mae waiting period guidelines on waiting periods after a short sale and deed in lieu will be changing effective August 15, 2014 for those who are seeking to get a conventional loan after a short sale or deed in lieu of foreclosure.  Currently, Fannie Mae waiting period guidelines to qualify for a conventional loan after a short sale or deed in lieu is 2 years after the short sale or deed in lieu of foreclosure as long as the conventional mortgage loan borrower has at least a 20% down payment on a home purchase or at least 20% equity in their home for a refinance mortgage loan.  Fannie Mae waiting period guidelines for those conventional mortgage loan borrowers with only 10% down payment on a home purchase or those with 10% equity for a conventional mortgage loan refinance is 4 years.

New Fannie Mae Waiting Period After Short Sale And Foreclosure

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 effective August 16th, 2014.  Fannie Mae will be changing the two year waiting period requirement with 20% down payment after a short sale or deed in lieu to a mandatory 4 year waiting period.

There is good news for those conventional mortgage loan borrowers who do not have the 20% down payment and only have the 10% down payment on a home purchase.  You no longer need a 10% down payment to qualify for a conventional mortgage 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 to 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 is 10% down payment.

Fannie Mae waiting period guidelines does 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 has extenuating circumstances such as an involuntary job loss and/or substantial loss of household income but do not count on going this route because the chances will be extremely tough and it will be up to the mortgage loan underwriter’s discretion.

August 15, 2014: Fannie Mae New Waiting Period Guidelines Into Effect

For those home buyers who currently have the 20% down payment and are counting on getting a conventional mortgage loan after 2 years of a short sale or deed in lieu of foreclosure, they need to get their mortgage applications, disclosures, and purchase contract submitted to their mortgage lenders no later than August 15, 2014.  Any conventional mortgage loan applications from borrowers with 20% down payment and 2 years after a short sale or deed in lieu of foreclosure after this date will be null and void and the new 4 year waiting period will apply.

Related> Buying again after short sale or short sale

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