Yes, it is possible to buy a home after a foreclosure, but only after a certain amount of time has passed. Most lenders these days underwrite their loans to either Fannie Mae or FHA guidelines, and both have a required waiting period before you will be able to qualify for a purchase home loan.
Foreclosure Waiting Period for Fannie Mae Financing
The waiting period under Fannie Mae guidelines after a foreclosure is 7 years. In other words, you'll need to wait at least 7 years after the completion date of your foreclosure to qualify for a new Fannie Mae loan.
You may be able to get the waiting period reduced, but only if you can show that circumstances well beyond your control led directly to the foreclosure. This isn't always easy to accomplish because mortgage underwriters may define "extenuating circumstances" very differently.
Banks these days fear the dreaded loan "buy back", so they often won't mess with loans that fall into gray areas in the guidelines. The last thing they want is to have to buy back the loan from their investor over a difference in opinion of what constitutes "extenuating circumstances".
However, having said that, if circumstances well beyond your control led directly to the foreclosure, it might be worth checking with a few banks to see if you can get approved. It probably will be an uphill battle, but if you're really interested in purchasing a home, it might be worth checking around a bit.
Foreclosure Waiting Period for FHA Loans
Under FHA guidelines, the standard foreclosure waiting period is a less stringent 3 years. FHA also allows for reductions in the waiting period due to extenuating circumstances, but as with the Fannie Mae guidelines, what qualifies can be very subjective and it may be tough to get a lender to approve your loan.
Conclusion
If you had a foreclosure and you're still in the Fannie Mae and FHA waiting periods, it's a good idea to start working right away to clean up and reestablish your credit. Pay all bills on time, clear up any negative credit items, and pay off debt. The idea is to get your credit in the best shape possible so once the waiting period is over, you'll be well-positioned to get the best mortgage deal possible.
Note that what is presented here is just a very general overview. Lending guidelines can change at any time and other guidelines may apply to your particular situation.
Foreclosure Waiting Period for Fannie Mae Financing
The waiting period under Fannie Mae guidelines after a foreclosure is 7 years. In other words, you'll need to wait at least 7 years after the completion date of your foreclosure to qualify for a new Fannie Mae loan.
You may be able to get the waiting period reduced, but only if you can show that circumstances well beyond your control led directly to the foreclosure. This isn't always easy to accomplish because mortgage underwriters may define "extenuating circumstances" very differently.
Banks these days fear the dreaded loan "buy back", so they often won't mess with loans that fall into gray areas in the guidelines. The last thing they want is to have to buy back the loan from their investor over a difference in opinion of what constitutes "extenuating circumstances".
However, having said that, if circumstances well beyond your control led directly to the foreclosure, it might be worth checking with a few banks to see if you can get approved. It probably will be an uphill battle, but if you're really interested in purchasing a home, it might be worth checking around a bit.
Foreclosure Waiting Period for FHA Loans
Under FHA guidelines, the standard foreclosure waiting period is a less stringent 3 years. FHA also allows for reductions in the waiting period due to extenuating circumstances, but as with the Fannie Mae guidelines, what qualifies can be very subjective and it may be tough to get a lender to approve your loan.
Conclusion
If you had a foreclosure and you're still in the Fannie Mae and FHA waiting periods, it's a good idea to start working right away to clean up and reestablish your credit. Pay all bills on time, clear up any negative credit items, and pay off debt. The idea is to get your credit in the best shape possible so once the waiting period is over, you'll be well-positioned to get the best mortgage deal possible.
Note that what is presented here is just a very general overview. Lending guidelines can change at any time and other guidelines may apply to your particular situation.
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