Recently, Fannie Mae announced that on August 16, 2014, they will be changing the waiting period associated with the purchase of a new home after a short sale or a deed in lieu of foreclosure, from a minimum of two years, to four years.
Right now, there is a staggered waiting period that allows a homeowner to purchase a new home with a Fannie Mae conventional loan two years after the finalization of a short sale or deed in lieu of foreclosure. In order to that, the buyer must provide a 20% down payment on the purchase of the new home and have had clean credit since the event.
However, on August 16, 2014, the waiting period for a homeowner to purchase a new home after a foreclosure becomes four years. The good news though is that new home buyers will be allowed to follow standard Fannie Mae guidelines and put as little as a 5% down payment down on the purchase of a home after a short sale.
In addition, if a homeowner can prove that the short sale was due to an extenuating circumstance (loss of job and/or wages), then the waiting period may still be reduced to two years. However, unless a buyer has strong documentation of this, the two year exception cannot be counted on.
For detailed information check out the Fannie Mae web page on this topic…