Short sale is increasingly becoming a common option to sell a house in San Jose and rest of the San Francisco (SF) Bay area. A short sale is a transaction where a seller sells the property for less that what was owed. If you went through a short sale you could have this question – Do I now qualify for a loan? FHA recently came with a guideline on this question. Below are the highlights:
You are not eligible for a new FHA mortgage if you pursued a short sale agreement on your principal residence simply to
- Take advantage of declining market conditions, and
- Purchase, at a reduced price, a similar or superior property within a reasonable commuting distance.
However you could be considered eligible for a new FHA-insured mortgage if
- You were current on your mortgage and other installment debts at the time of the short sale of your previously owned property, and
- The proceeds from the short sale served as payment in full.
If you were in default on your mortgage at the time of the short sale you are not eligible for a new FHA-insured mortgage for three years from the date of the short sale. Lenders may make exceptions to this rule under certain circumstances.
This guidance is effective immediately.
Related post – FHA Loan requirements for San Jose and Bay Area
If you had a short sale and would like to find out what are your options with regard to buying a new home contact me. I will be glad to explore all options for you.
Photo courtesy www.Photoxpress.com
We recently (3 weeks ago) completed short sale of our home and are currently renting. We have stayed current on all our payments prior to the short sale. We are interested to move in a neighborhood about 10 miles from our previous home. Are we qualify for FHA load? If not, what are our options? Before the short sale, my wife and I both have credit score of 800+. Thank you.