Short Sale/Deed in Lieu of Foreclosure Waiting Period Changes

SUN IS SHINNING THROUGH THE CLOUDY DAYS AGAIN!  YOU CAN BE A HOMEOWNER AGAIN AFTER FORECLOSURE OR SHORT SALE 

Fannie Mae has recently announced the waiting period requirements for borrowers who have had a previous deed-in-lieu of foreclosure or pre-foreclosure sale are being updated to now require a four-year waiting period; though a two-year waiting period will be permitted if the event was due to extenuating circumstances and the loan complies with all requirements specific to a deed-in-lieu of foreclosure or a pre-foreclosure sale due to extenuating circumstances, as specified in the Fannie Mae Selling Guide. The loan-to-value restrictions previously tied to different waiting period time-frames are also being removed. 

Short Sale/Deed in Lieu of Foreclosure

(Changes for applications taken on August 16, 2014 or later)

Waiting Periods Under
the Old Guideline
(On or before 8-15-2014)

Waiting Periods Under
the New Guideline
(On or after 8-16-2014)

7 years if the borrower puts <10% down
Recovery period must have elapsed prior to the date of the application.

4 years from the date the deed to the property was transferred back to the servicer. No LTV/CLTV limitations.

4 years if the borrower puts 10% down
Recovery period must have elapsed prior to the date of the application.

2 years if the borrower puts 20% down
Recovery period must have elapsed prior to the date of the application.