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    How long after I have a foreclosure or short sale can I buy a home again

    This call comes in several times a week to our REMAX of Santa Clarita CA offices. Callers have looked online, but don’t want to tie up with a lender at this point, they just want information.

    So, this is pertinent to those of you with the question of when you are able to buy again after going through the trauma of a Foreclosure or Short Sale, here is the intel from our BEST Santa Clarita Lender. Thanks to Dwayne Okpaise with Augusta Financial for his intel pertaining to this article.

    Dwayne at Augusta Financial Santa Clarita Lender

    Here is the Meat!!!

    Most “sponsored” loan and lending programs are going to treat Short Sales and Foreclosures, somewhat the same, with regard to “timeframes” after the Distressed Seller has their, previously owned, property liquidated.

    Only when the “conventional” loan(c below) enters the picture, is where the waters start to get a little muddy.

    – FHA requires 3 years after a short sale or Foreclosure

    The FHA Loan, 3.5% down, is one of the most written loan and lending programs around. The clients that are using this loan product are definitely the majority.

    However, to use an FHA loan, the property has to fit certain requirements. Single Family Homes need to be in some semblance of “good repair”. Condo and Townhome Complexes have to be FHA certified.

    Contact us so we can explain more – but it’s hard to argue with buying real estate, only needing a 3.5% down payment.

    – VA requires 2 years after the short sale or Foreclosure

    The shortest timeframe yet. We have had our Military friends deployed, thereby losing their homes before the “rules” were strengthened to protect them. Most of these clients were in the early days of the last distressed real estate market.

    Police Officers, Highway Patrol and Deputy Sheriff’s, that were still in the “reserve corps”, with one of the Military Branches, being activated to go and fight in the war, experienced their fair share of hardship.

    Those “activations” stressed” their earnings, in some cases, thereby causing them to have to short sale. Those “activations” also caused their unfair share of Divorce and Death – unfortunately 🙁

    – Conventional requires 4 years after a Short Sale

    With a 10% down payment, 4 years has to elapse between a Short Sale and the time you want to “finance” real estate again.

    Conventional Loans with 10% down – with regard to Foreclosure – Take 7 Years to heal, between the time the foreclosure is discharged and the time you want to obtain a residential real estate loan.

    (so hence the advantage of a short sale – shorter time frames)

    – Another Option?

    How about buying a home 1 day out of foreclosure?

    There is another option that real estate buyers can consider:

    Buying 1 day from having a Foreclosure Discharged – there are some “rules” that have to be abided by:

    • This option is not for a Fannie/Freddie or HUD Loan Product.
    • Requires at least 20% down and no gift funds are allowed.
    • Borrowers must qualify without a co-signed and the max debt ratio is 43%.
    • You can obtain 5/1 and 7/1 ARM’s only – ARM – Adjustable Rate Mortgage
    • Rates are higher than typical rates today (as of the date of this SCVRE article – 7.25% with a cost of 2% or 2 points.
    • No prepayment penalty, so the client can refinance once they are in a position to qualify for a re-finance. (per Dwayne, this works well with borrowers that can refinance in a couple of years once the short sale or foreclosure has been seasoned)
    • Multiple Foreclosures/Short Sales are not allowed.

    Reach out to us here at REMAX of Santa Clarita when you are ready to “roll” toward your housing purchase and Thanks for taking the time to read and share!

     

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    Paris and Connor MacIvor

    Connor and Paris MacIvor are in the Top 1% of Realtors Nationwide, starting their real estate business in 1998 with RE/MAX Gateway - Santa Clarita Valley and Valencia CA. Their becoming licensed real estate consultants and representatives came from the horrible experience they had when they bought their first home. There were many things that the agent they had hired did not explain and disclose, which per law he should have. Getting that agent on the phone after they closed escrow and after he had gotten paid was impossible. Paris and Connor called the broker, the board of realtors, the office manager and all they received was the promise of a phone call back. The remedy did come, but not as fast and in the way they wanted. That act - that bad agent was the reason why Paris and Connor became Realtors. That was all they needed to vow to never let the same fate befall anyone else, that befell them. Today Connor and Paris are focused on client service. Protection and top-shelf service with regard to their real estate clientele. They primarily work within the Santa Clarita Valley and Valencia CA. However, for a referral, where 80+ of their business is referrals they have License and Will Travel to other parts of Ventura County, Los Angeles County, and Orange County to handle real estate transactions for those who trust their real estate operation. Writing on their Real Estate Blog is a passion. SCVnest.com/blog is where you will find over 10,000 real estate articles. Go to SCVnest.com/radio to listen to their latest real estate radio broadcast.

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