Lost Your Home to “Almost” Foreclosure? Fannie Mae Wants to Help You Buy Another One
In the past, if you “almost” lost a home to foreclosure, eg, did a short sale, did a deed in lieu of foreclosure, etc., you had to wait four to five years in order to qualify — under Fannie Mae guidelines — to buy another one. Well that’s no longer the case. Now, you can qualify in as little as two years.
According to the New York Times article, Fannie Mae wants to help some troubled borrowers get back into home market, the organization sent out a a bulletin to lenders dated April 14 stating:
. . . it is relaxing rules that prevented loan applicants who have participated in short sales or deeds in lieu of foreclosure from obtaining a new mortgage for extended periods of time. The new rules are scheduled to take effect July 1.
Is This Rule Change in Home Loan Qualifications a Slippery Slope into More Home Foreclosures?
Apparently not.
While Fannie is not making homeowners who’ve had trouble with home ownership in the past wait as long, they have tighted qualifying guidelines. For example, instead of a 3 or 5% down payment like in the past. Now the down payment has to be significantly more — 20 percent.
Home Loan Qualification Under Fannie Mae: Down Payment Determines How Long You Have to Wait
If a prospective borrowner can’t come up with that much, they’ll have to wait longer. How long depends on how much of a down payment they have, eg:
10% — wait 4 years, UNLESS applicant can prove that the loss of a previous home was due to extenuating circumstances (eg, loss of job, medical bills, etc.);
Less than 10% – could be longer than four years.
While losing a home you want is always hard, it’s not the end of the world. It is possible to recover, mortgage giants like Fannie Mae are assisting in that recovery.
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Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.