After Foreclosure - Can You Buy Another Home?

By
Real Estate Mortgage Broker with Steve Thorne NC Mortgage Experts

It's Been A Roller Coaster RideIf you are one of the millions of families that lost their home in the last couple of years to Foreclosure… you might think…

Been There – Done That

You might not want to own a home again! 

But if you’re one of those folks who truly does want to purchase again, here’s some potentially good news.

USDA says that they will allow you to purchase a new home to owner occupy, after foreclosure if you’ve done the following things:

  • Wait 3 years from the date of the Foreclosure.
  • Re-establish Credit
  • Have Credit Scores that meet the guidelines (as of the date I am writing this, that means you need a 620 score.)

Here’s the other part… you need to DOCUMENT what happened, and why you ended up in a Foreclosure. 

“FHA insured mortgages are generally not available to borrowers whose property was foreclosed on or given a deed-in-lieu of foreclosure within the previous three years. However, if the foreclosure of the borrower’s main residence was the result of extenuating circumstances, an exception may be granted if they have since established good credit…

This does not include the inability to sell a home when transferring from one area to another.”  So you MIGHT be able to buy after two years. 

My “real life” answer to this question is… in today’s credit environment, it’s going to be HARD to get a Bank to loan you money for a home if you had your home foreclosed upon less than 3 years ago.  I know what the guidelines say, but Bank’s do not have to follow guidelines set by FHA. 

FHA does not say you have to have a 620 credit score, but there are VERY few lenders who will allow you to purchase a home without at least a 620 score!  There are some Banks that will not allow you to purchase with FHA if you have ANY lates on ANY accounts in the last 12 months!  That’s not an FHA guideline, that’s a BANK rule, so again – I’d say - you might still be forced to wait 3 years, and have all of your documentation in order!

These guidelines are different from the Fannie Mae / Freddie Mac Conventional Guidelines… And these foreclosure guidelines are changing OFTEN… so I would not rely soly on information you get from an online site. 

Call a loan officer.

If you are considering a mortgage loan in NC, call Steve and Eleanor Thorne, First Financial Services, 919-649-5058 we'd love to help answer your questions!

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Re-Bloggged 12 times:

Re-Blogged By Re-Blogged At
  1. Irina Riley 01/28/2011 01:03 PM
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  4. Jonathan Osman 01/29/2011 09:04 AM
  5. Karen McAlister Jordan 01/29/2011 10:46 AM
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  8. Garrigus Real Estate - Call Now: 1 (888) 9-LIST-IT 01/29/2011 05:14 PM
  9. Margaret Woda 01/30/2011 07:04 AM
  10. Jack Tenold, Reverse Mortgage Specialist Washington | Oregon | California - refinance & purchase 02/01/2011 08:04 PM
  11. Daniel H. Fisher 06/09/2011 06:23 PM
  12. Joyce Kelley 05/26/2013 06:07 PM
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Topic:
Lending / Financial
Location:
North Carolina
Groups:
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Rainmaker
392,564
Nevin Williams
Raleigh Mortgage Pro
Sierra Pacific Mortgage Raleigh

Eleanor - These are all great points especially the one about if FHA allows it doesn't mean the lender will.  It is also true that most lenders require at least a 620 FICO on an FHA purchase.  I only have 1 lender that goes down to a 580 and they are very difficult to deal with.

February 14, 2011 04:12 PM
Rainmaker
325,145
Esko Kiuru

Eleanor,

As banks get on a more solid footing again they'll start easing up on qualifying guidelines that will also help those folks with foreclosure on their records.

 

March 11, 2011 09:12 PM
Anonymous #57
Anonymous
alison

I understood that if you foreclosed with Fannie Mae/FM, was homsteaded, paid into PMI, and were laid off due to the economical crisis that you were covered under the 2009-2012 act - that an individual could buy an affordable home within two years with no discrimination?? What happened to that??

 

fiffig40@yahoo.com

July 19, 2011 09:03 AM
Rainer
3,788
Terri Club

I had a client who wanted to buy a home in Arizona, but he had a foreclosure.  After researching the web I found a loan program at www.cfsflex.com, they allow a mortgage after a foreclosure.  There is no waiting period.  Good to see lending options coming back.

April 21, 2013 10:28 AM
Anonymous #59
Anonymous
Deidre

I am curious Terri, is there any program that you know of in Florida similar to the www.cfsflex.com to purchase a home after a deed in lieu of foreclosure? 

April 21, 2013 01:06 PM
Anonymous
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Eleanor Thorne

Cary Mortgage Loans 919-649-5057
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