As a San Diego Mortgage Broker I receive many calls from clients who have had past short sales, foreclosures, or bankruptcies, and would like to know when they will be able to qualify again for a San Diego purchase loan. Due to the events of the last 5 years, we know there are a lot of people who have one or several of these items on their credit report. This article will discuss the timeframes and conditions in order for someone to qualify for a loan for each of the above three derogatory credit items.
Financing After a Short Sale in San Diego
San Diego Conventional Loans – Fannie Mae’s guidelines state that if you have a pre foreclosure or short sale they will consider on a case-by-case basis a new loan after 2 years with a maximum Loan to Value (LTV) of 80% and re-established credit. This usually means some sort of extenuating circumstances occurred that caused the short sale. Four years would be required if there are no extenuating circumstances or for transactions with a maximum LTV of 90% and seven years for transactions with an LTV greater than 90%.
San Diego FHA Loans – FHA’s guidelines state that new financing will be available 3 years from the date the short sale is reported on the credit report. Re-established credit is required and there can be no derogatory credit including late payments, collections, charge offs or judgments after the short sale.
San Diego VA Loans – VA’s guidelines state new financing will be available 2 years from the date of the short sale. Re-established credit is required and no derogatory credit including late payments, collections, charge offs or judgments after the short sale can occur.
Financing After a Foreclosure in San Diego
San Diego Conventional Loans – Fannie Mae’s guidelines state that you may obtain a new loan 7 years after a foreclosure. You must have re-established your credit and have no derogatory credit including late payments, collections, charge offs or judgments after the foreclosure. In some cases if there are extenuating circumstances you may be able to obtain a loan sooner than 7 years.
San Diego FHA Loans – FHA’s guidelines state that new financing will be available 3 years from the date the foreclosure is reported on the credit report. Re-established credit is required and there can be no derogatory credit including late payments, collections, charge offs or judgments after the foreclosure.
San Diego VA Loans – VA’s guidelines state new financing will be available 2 years from the date of the foreclosure. Re-established credit is required and no derogatory credit including late payments, collections, charge offs or judgments after the foreclosure can occur.
Financing After a Bankruptcy in San Diego
San Diego Conventional Loans – Fannie Mae’s guidelines state that you may obtain a new loan 4 years from the last date of the filed, discharged or dismissed chapter 7 or 13 bankruptcy. You must have re-established your credit and have no derogatory credit including late payments, collections, charge offs or judgments after the bankruptcy.
San Diego FHA Loans – FHA’s guidelines state that new financing will be available 2 years from the date the chapter 7 or 13 bankruptcy is filed, discharged or dismissed on the credit report. Re-established credit is required and there can be no derogatory credit including late payments, collections, charge offs or judgments after the bankruptcy.
San Diego VA Loans – VA’s guidelines state new financing will be available 2 years from the date of the chapter 7 or 13 bankruptcy is filed, discharged or dismissed on the credit report. Re-established credit is required and no derogatory credit including late payments, collections, charge offs or judgments after the bankruptcy can occur.
Recent Success Story
I recently helped a client with a purchase loan in San Diego that had a bankruptcy and foreclosure 4 years ago. I was able to get her a San Diego FHA loan with 3.5% down payment. She had re-established her credit over those 4 years and had a clean history since then. The loan had other challenges as well because it was a condo complex and the client’s parents were non-occupant co-borrowers who were providing a 100% of the down payment. This loan had multiple obstacles, but I was able to get it closed and my client was ecstatic.
If you have had a short sale, Foreclosure, or Bankruptcy in San Diego in the past and are looking for a purchase loan in San Diego, give me a call to discuss your situation. I am a San Diego Mortgage Broker with over 10 years of experience handling these types of situations.