It’s been three years since the height of the foreclosure crisis and many former home owners are ready to re-enter the housing market. Many have spent the last few years rebuilding their credit and are ready to buy. Following are some typical “wait times” depending on the former home owners’ circumstances, of course:
- Home owners with a foreclosure must wait seven years before they can qualify for a loan through Fannie Mae and Freddie Mac. If the foreclosure was part of a bankruptcy, the wait is only four years.
- Home owners who experienced a short sale on a previous home must wait two years for another Fannie Mae and Freddie Mac loan.
- Home owners looking for a Federal Housing Administration (FHA) loan must wait three years after a foreclosure or a short sale.
- Home owners looking for a Federal Housing Administration (FHA) loan who were forced into a foreclosure because of a 20 percent cut in pay may qualify for a new loan after only one year through the FHA’s Back to Work program.
Again, circumstances vary as do lending practices but, in general, many who suffered through foreclosures during the recession are now getting closer to buying again.