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St Louis Real Estate Search

How long after a foreclosure or short sale do you have to wait to get a home loan?

Over the past few years many people that had never faced financial trouble found themselves in foreclosure, doing a short-sale or deed in lieu or filing bankruptcy as a result of the burst of the housing bubble, record unemployment and a weak economy in general. People in this situation, many of whom were homeowners for years, were forced to lived with relatives or friends, or rent until they were able to get through their financial crisis. Now, many of these folks have been able to get back on their feet and want to buy a home again but don’t know when, or if they will be able to get a home loan again due to their past.

The good news is you can get a home loan again, even with a foreclosure, short sale, deed in lieu or a bankruptcy in your past. The bad news is, it will take time and effort and you will need the help of an experienced mortgage professional.

How long do you have to wait to get a home loan after a foreclosure, short-sale, deed in lieu or bankruptcy?

For a conventional loan:

  • Foreclosure-
    • 7 years without extenuating circumstances
    • 3 years with acceptable extenuating circumstances and 10 percent down payment. Primary home purchase ONLY.
  • Short-Sale & Deed in Lieu of Foreclosure-
    • 7 years with less than a 10 percent down payment
    • 4 years with a 10 percent down payment
    • 2 years with a 20 percent down payment
    • 2 years with acceptable extenuating circumstances and 10 percent down payment.
  • Bankruptcy Chapter 7-
    • 4 years from discharge date
    • 2 years from discharge date with with acceptable extenuating circumstances.
  • Bankruptcy Chapter 13-
    • 2 years from discharged data
    • 4 years from dismissal date

For FHA loan:

  • Foreclosure & Deed in Lieu of Foreclosure-
    • 3 years
    • Less than 2 years, but not less than 12 months with acceptable extenuating circumstances.
  • Short-Sale –
    • 3 years
    • No waiting period if borrower had no late payments on any mortgages and consumer debts within the 12 month period preceding the short sale AND they are not taking advantage of declining market conditions.
  • Bankruptcy Chapter 7-
    • 2 years from discharge date with re-established credit paid as agreed or no new credit obligations incurred.
    • Less than 2 years, but not less than 12 months if the bankruptcy was caused by acceptable extenuating circumstances and borrower has since exhibited a documented ability to manage financial affairs in a responsible manner.
  • Bankruptcy Chapter 13- year payout period under bankruptcy has elapsed and the borrower’s payment performance has been satisfactory and all required payments made on time.

For more information on obtaining a home loan after a foreclosure, short-sale, deed in lieu or bankruptcy, please Click here.

About the author:
Bob is a Senior Residential Mortgage Lender with First State Bank in St. Charles, Missouri and has been active in the industry for 31 years. Bob is a member of the St. Louis Association (SLAR) of REALTORS Affiliate Committee, is an Affiliate Ambassador member and was the SLAR Affiliate of the year in 2010. Bob has also served on the governing board of the St. Louis WCR and was the St. Louis WCR Affiliate of the year in 2009.

Bob Sargent

Sr. Residential Mortgage Lender

NMLS # 237631

314-277-2942

First State Bank Mortgage

A Division of First State Bank

2850 West Clay

St. Charles MO 63301

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