You Can Buy Again

It can take quite a while to recover from negative financial events like a bankruptcy and get your life back in order. Part of the high buyer demand in real estate right now is a result of those homeowners who went through a short sale or foreclosure during the recession now returning to the market, often called "boomerang buyers." If you had financial trouble in the past and are wondering when you might be able to qualify for a mortgage loan again, below are some general guidelines to help you plan.

Conventional / Fannie Mae

• Chapter 7 Bankruptcy - 4 year seasoning required from the discharge or dismissal date to the lender's credit report date.
• Chapter 13 Bankruptcy - 2 years from discharge date of 4 years after dismissal date to the lender's credit report date.
• Foreclosure - 7 year seasoning required from the completion date to the disbursement date of the new loan.
• Deed-in-lieu of Foreclosure - 4 year seasoning required from the completion date to the disbursement date of the new loan.
• Short Sale - 2 year seasoning required from the completion date to the disbursement of the new loan.

FHA

• Chapter 7 Bankruptcy - 2 year seasoning required from discharge date to loan application date.
• Chapter 13 Bankruptcy - Minimum 1 year timely payout according to the repayment plan at time of application along with trustee permission letter for new mortgage.
• Foreclosure, Deed-in-lieu of Foreclosure, Pre-foreclosure, Short Sale - 3 year seasoning required from foreclosure end date to loan approval date.

VA

• Chapter 7 Bankruptcy - 2 year seasoning from date of discharge.
• Chapter 13 Bankruptcy - Minimum 1 year timely payout required according to the replayment plan at time of application along with trustee permission letter for new mortgage.
• Deed-in-lieu of Foreclosure, Pre-foreclosure, Short Sale - Case by case basis as event may have been beyond the borrower's control.
• Foreclosure - 2 years seasoning from date of foreclosure.

USDA Rural

• Chapter 7 Bankruptcy - 3 year seasoning required.
• Chapter 13 Bankruptcy - Minimum 1 year timely payout according to the repayment plan at time of application along with trustee permission letter for new mortgage.
• Foreclosure, Deed-in-lieu of Foreclosure, Pre-foreclosure, Short Sale - 3 year seasoning required from foreclosure end date to loan approval date.

Downpayment requirements may also change depending on the type of loan sought. If you think you may be able to qualify for a new loan, be sure to talk with a mortgage expert about your specific situation to make sure that these timelines apply. If you need a referral to an experienced mortgage lender, don't hesitate to contact me; I have good relationships with several great professionals who will take good care of you.

---

I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

---

A Toast to the Happy Couple

Well, happier anyway.  All relationships have some struggles in trying to get everyone's needs met simultaneously, but sometimes compromises can be reached that make everyone happier.  That's where the Federal Housing Administration (FHA) and condominium developments are going - putting aside old fears and resentments, bringing home flowers, and coming to a more amicable union.

FHA loans are a great option for some homebuyers as they require smaller down payments and usually have lower credit hurdles than other types of loans.  It's also possible to use monetary gifts to pay for closing costs, and even roll the costs of renovations into the financing.  However, there is a downside.  FHA home loans have relatively low limits, and mortgage protection insurance can be more onerous than on a conventional loan.  

Probably wouldn't qualify for FHA financing...

Another consideration is that the FHA looks not only at the person who is doing the borrowing, but the property being purchased.  Homes bought with FHA financing have to go through an FHA appraisal, which can be strict with its requirements.  For instance, with other lenders you may be able to get by with a seller credit to replace the dying furnace, but the FHA will require the work actually be completed prior to loan approval.  Also, it can be more difficult to finance a condominium due to regulations that govern the complex as a whole, not just the individual unit.  It's really important to talk to a professional mortgage broker who can help you decide on the best option for your unique situation.

Some positive changes have been made recently that should help more potential homebuyers, specifically in regards to purchasing condominiums.  In the past, FHA had strict rules about how many investors could own property in a condo development, and what percentage of the whole they could hold in order for the development to still qualify.  The former remains the same; at least half of the units must be owner-occupied to get approval.  However, now a single investor may own up to half of the units and the development will retain FHA certification, up from only 10% previously.

May allow for more business uses...

Other significant changes have been introduced, with more promised.  Condo complexes can now devote up to half of their space to non-residential commercial use, up from only 25%.  In regards to delinquent HOA dues, FHA is now allowing up to 15% of the units to be 60 days delinquent, up from just 30 days.  And while a lot of folks are struggling right now to make the mortgage payment and may not be as current with their homeowners dues, this could make the difference for some projects.

If you are even considering FHA financing for an attached dwelling, it's a good idea to talk with a mortgage professional early on.  While FHA has eased some of their requirements, it may still take a lot of hoop-jumping to get approval, which can delay transactions for weeks or even longer.  If you need a mortgage professional that's tried and true, give me a call.


images:  Robert Tewart, Jeremy Levine Design

---

I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

---