Qualifying For Conventional Loan After Foreclosure

Qualifying for Conventional Loans After Foreclosure is much tougher than qualifying after FHA Loans After Foreclosure.  Home buyers can qualify for conventional loan after foreclosure but there are mandatory waiting period requirements on top of qualifying for all other conventional lending guidelines. To qualify for a conventional loan, you need a minimum credit score of 620 FICO.  Debt to income ratios cannot exceed 45% DTI.  You need timely payments for the past 12 months with no late payments.  Fannie Mae will not allow any non-occupant co-borrowers to be added on the conventional loan.  Freddie Mac does allow non-occupant co-borrower to be added on the conventional loan.  With Fannie Mae, you can qualify for a 3% down payment conventional home purchase loan only if you are a first time home buyer. Freddie Mac with allow a 3% down payment home purchase conventional loan for home buyers who have not owned a home for at least three years.  Conventional Loan Programs can be used for single family homes, condominiums, and one to four unit properties,  You can purchase owner occupied properties, second homes, and investment homes with conventional loans.

Waiting Period In Qualifying For Conventional Loan After Foreclosure

Unfortunately, waiting period in qualifying for conventional loan after foreclosure is seven years from the recorded date the foreclosure.  The recorded date is the key term.  It is not the date you surrendered your keys and signed the foreclosure paperwork with your lender.  The recorded date of the foreclosure is the date is either the date of the sheriff’s sale or the date that the deed was transferred out of your name and into the name of your mortgage lender or the name of a new buyer and recorded at the county recorder of deeds’ office and stamped.  There are cases where homeowners have surrendered the keys to their home and voluntarily walked out of the home and thought that the foreclosure process was over but later find out that the transfer of their name did not happen until many years later and the waiting period in qualifying for conventional loan after foreclosure did not even start.

Mortgage Part Of Bankruptcy

If you had a mortgage part of bankruptcy, the waiting period in qualifying for conventional loan after foreclosure is four years from the discharge date of your Chapter 7 Bankruptcy and not the recorded date of the foreclosure even though the foreclosure did not get recorded after the discharged date of the bankruptcy. This new Fannie Mae guidelines of qualifying for conventional loan after foreclosure went into effect last year, August 2014 and has opened up many doors for home buyers who had included their foreclosure part of bankruptcy.

Waiting Period In Qualifying For Conventional Loan After Deed In Lieu Of Foreclosure

FHA treats foreclosures and deed in lieu of foreclosures the same way. There is a three year waiting period in qualifying for FHA Loan After Foreclosure and Deed In Lieu of Foreclosure from the recorded date or the date of the sheriff’s sale.  However, with conventional loans, there is a four year waiting period in qualifying for conventional loan after deed in lieu of foreclosure from the recorded date of the deed in lieu of foreclosure.

Waiting Period Qualifying For Conventional Loan After Short Sale

To qualify for conventional loan after short sale, there is a four year waiting period from the date of the short sale which is reflected from the date of the HUD Settlement Statement of the short sale.

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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