My brother had a short sale on his home 2 years ago. Due to a family illness and inability to rent/sell their home during the housing downturn they were forced to pay their mortgage while renting in another state. They were only able to afford this for a year or so and were forced to short sale.
They were a week or so from being eligible to buy again and were recently told that Fannie/Freddie changed their rules and they now need to wait 4 years.
Is this only for gov't backed loans? Are certain lenders or types of loans able to work around this new restriction? From what I read there are extenuating circumstances that could make eligibility 2 years again - what do they consider extenuating? Thanks!
Hey John. Yes, not great timing for your brother. Fannie did change their short sale waiting period to 4 years, aligning their guidelines with Freddie Macs. In general, FHA allows buyers to finance a new home 3 years after a short sale is completed (with possible exceptions for remarkably extenuating circumstances), Fannie/Freddie are now 4 with no exceptions. Some private investors will do purchases for short sale buyers with little/no elapsed time. Certainly circumstances and down payment play a large role there. I'd be glad to further discuss the situation if you like, can contact me through my profile. Thanks, Ted