CR Note: I’m asked this question frequently, so here is a repost …
Some information from mortgage broker Solyent Green is People:
For people with foreclosures or short sales on their record, the waiting period depends on if there are “Extenuating Circumstances” EC ( death in family, company relocation/shut down – about 5/10% of cases) or if the foreclosure or short sale was due to “Financial Mismanagement” FM (the majority of cases).
Jumbo loans, Foreclosure: 7 years (FM and EC)
Jumbo loans, Short Sale: 7 years FM, only 4 years EC
Fannie/Freddie, Foreclosure: 7 years FM, 3 years EC
Fannie/Freddie, Short Sale: 4 years FM, 2 years EC
FHA Foreclosure/Short Sale: 3 years (FM and EC)
A large number of the foreclosures were in 2009 and 2010, so those people will be eligible to borrow soon.
CR Note: Even though people are eligible to borrow, doesn’t mean they will. They will have to saved enough for a downpayment, and many of these people are psychological scarred (and will wait longer to buy again).