Families who had once lost their home to foreclosure following the housing crash are now re-emerging and looking to buy again. Some builders are even promoting special financing programs specifically for these buyers.
In order to qualify for an FHA mortgage, buyers must wait 2 years or more to apply again following a short sale and sometimes 3-5 years after a foreclosure. . Using that benchmark, about 729,000 households that were foreclosed on during the housing crash are now eligible to apply for an FHA mortgage–up from 285,000 a year ago.
Fannie Mae and Freddie Mac require a much longer wait than FHA to qualify for a loan after a foreclosure or short sale, some up to seven years.
But just because “boomerang” families are allowed to apply again for financing for a home purchase doesn’t mean they’ll qualify for a loan. They will still have to show a strong credit score and meet stringent underwriting standards.
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