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Loan Consultant | NMLS #230507

PINNACLE HOME LOANS

Corporate NMLS#02083817

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Life After Bankruptcy, Foreclosure & Short Sale

  • Writer: Toni F. Ryan
    Toni F. Ryan
  • Jul 17, 2018
  • 2 min read

Updated: Jan 31, 2024



A common questions many home buyers have today is, “How long do I have to wait before obtaining financing after a bankruptcy, foreclosure or short sale?”

Below is an overview based on credit issue:

Bankruptcy 

Conventional • Ch. 7 or 11: 2 years with extenuating circumstance*, 4 year without and re-established credit • CH 13 – 2 years from discharge date or 4 years from dismissal date

FHA • Ch. 7: 2 years from discharge date with re-established credit – no delinquencies for 2 years • Ch. 13: 1 year of the payout date must elapse and satisfactory payment performance with permission from the court to enter into a mortgage

VA •  Ch. 7: 2 years from discharge date with re-established credit – no delinquencies for 2 years • Ch. 13: 1 year of the payout date must elapse and satisfactory payment performance with permission from the court to enter into a mortgage

Foreclosure

Conventional: 7 years from completion date FHA:  3 years from completion date VA: 2-3 years from completion date with good explanation of circumstances – must have sufficient entitlement.

Short Sale:

Conventional: 2 years – (Changing to 4 years on 8/15/14) with extenuating circumstances*- 4 years without extenuating circumstances FHA: 1 year if qualified for “Back to Work Program” – 2 years with extenuating circumstances* or all debts were current until the short sale date - 3 years if short sale was not due to extenuating circumstances or debts were not paid on time before short sale. VA: 2-3 years from completion date with good explanation or circumstances. Must have sufficient entitlement for new loan

NOTE: Currently, Conventional financing backed by FNMA has offered a wait period for short sales as low as 2 years with extenuating circumstances but it is important to note that for those loan applications received after August 15th, the wait period increases to 4 years. If you fit into the above category and are considering financing, you should act now or you will be limited to FHA financing and possibly VA, if entitled to VA programs and have sufficient entitlement for a new loan. Time is of the essence to experience the joy of homeownership. *Always check with your mortgage professional for acceptable extenuating circumstances and any other changes that may have changed to the  programs listed since this printing.


ABOUT THE AUTHOR


Toni F. Ryan | NMLS#230507

Senior Loan Consultant

Peak Residential Lending 


Toni F. Ryan has over 20 years experience in mortgage lending - both on the wholesale and retail levels. She believes that education is key to making the best decision for YOU! She shares her insight into the lending world here and encourages your feedback. Don't forget to connect on Facebook!

 
 
 

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© 2025 by Toni F. Ryan - NMLS#230507

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Toni Ryan - NMLS#230507
Direct/Text: (530) 305-7668
Email: toni@toniryan.com

Main Office:
333 University Avenue Ste 200 #7
Sacramento, CA 95825
In-person meetings by appointment
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© 2025. All Rights Reserved | Equal Housing Lender | Not a commitment to lend. Rates and terms subject to change without notice. Licensed by the California Department of Financial Protection and Innovation under the California Residential Mortgage Act No. 4130968; AL #22653; AR #32700; AZ #1015403; Colorado regulated by the Division of Real Estate; DE #019623; FL #MLD819; Georgia Residential Mortgage Licensee #20924; ID #MBL-5861; Kansas Licensed Mortgage Company #MC.0025601; KY: #MC701698; MD: #16927; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance;Licensed by the Minnesota DOC #MN-MO-1141; Licensed by the NJ Department of Banking and Insurance; NC: L-152867; NV: #3681; OK: #ML012358; Licensed by the Oregon Division of Financial Regulation #ML-3808; PA: #37008; TN: #112513; Licensed by the Virginia State Corporation Commission #MC-5579, WV: #ML-31523/MB31759. NMLS #1141. www.nmlsconsumeraccess.org  Privacy Policy

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