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Waiting Periods to Purchase a new home after default

Author: Kevin Cloutier with excepts from Realtor Magazine
Written On: Fri, 01 Mar 2013

I get asked all the time about the time frames needed in order to be able to apply for a new mortgage. Each person's story is different and each loan type has its guidelines. I think the lending industry has started looking at what they need to do if the want to make loans to people again which is how they make money. Prospective buyer's who have experienced a foreclosure or bankruptcy can expect the following waiting period before they can seek loan approval.

Under: Fannie Mae and Freddie Mac VA FHA
Foreclosure 7 years-exceptions to 3 yrs. Not less than 2 yrs straight liquidation 3 yrs, but FHA may grant an exception
if extenuating circumstances and discharge provisions. If the loan was if the foreclosure was a result of
are met such as job loss or a foreclosed VA loan, the buyer must have serious illness or death of a wage
death of a wage earner. paid the VA back for its loss before earner and the borrower has reestab-
qualifying for a new VA loan. lished good credit.

Chapter 7 or 11 4 years (2 with extenuating Same as above Under a Chapter 7, 2 years after the
Bankruptcy circumstances). discharge with reestablished good
credit or no incurred new credit obli-
gations.

Chapter 13 Two years from discharge After making 12 months of payments One year current on required payments
Bankruptcy date; 4 years from dismissal to a court appointed trustee and the to be considered.
date. trustee or the bankruptcy judge approves
the new credit.