The amount of time it takes to be eligible to buy a home again after a short sale can vary depending on the specific circumstances of the sale, and the requirements of the lender or government program involved. Generally, the waiting period can be between 2-7 years.
Fannie Mae, which is a government-sponsored enterprise (GSE) and a major player in the mortgage market, requires that borrowers wait at least 7 years after a short sale to be eligible for a new mortgage. However, if the short sale was the result of extenuating circumstances, such as a job loss or medical hardship, the waiting period may be reduced to 2 years.
Similarly, the Federal Housing Administration (FHA) requires a waiting period of at least 3 years after a short sale to be eligible for a new FHA loan. However, if the short sale was the result of extenuating circumstances, the waiting period may be reduced to as little as 12 months.
VA loan has a 2 year waiting period after a short sale to be eligible for a new VA loan.
It’s worth noting that these are the guidelines of government-backed loans, many conventional loans (not backed by government) may have different waiting periods. It’s best to check with the lender you plan to use to get a mortgage, as they may have their own specific guidelines.
It’s also important to note that while the waiting period is a key factor, lenders will also look at other factors such as income, credit score, and debt-to-income ratio to determine whether to approve a loan application. It’s a good idea to improve your credit score and save for a down payment in the meantime.