How Long Before Banks Will Lend After A Foreclosure, Short Sale, Bankruptcy, or Deed In Lieu

San Joaquin and Sacramento counties have been hit hard by the housing market collapse.  With so many homes lost many are wondering when and if they can borrow money again  My goal today is to give you clearer answer to that question.

Here's a simple break down for minimum waiting periods:
Foreclosure: 3 Years (FHA) / 7 Years (Conventional)
Short Sale: 3 Years (FHA) / 4 Years (Conventional)
Deed In Lieu: 3 Years (FHA) / 4 Years (Conventional)
Bankruptcy: 2 Years (FHA) / 4 Years (Conventional)

Although you see the years clearly posted above it's not that simple.  You might receive a different answer depending on the circumstances surrounding your last home.  FHA has a minimum of 3 years, but that doesn't mean you will be approved at 3 years.  Investors are looking for circumstantial evidence to when reviewing the default on your past loan.  Hardships like loss of job and medical problems are usually considered acceptable reasons for default and can lead to minimum waiting times before borrowing.  Loss of value is not a good reason for default.


The goal before purchasing the next home is to have all supporting documentation to justify the reason for the loss of home and to fix the negative impact it left on your credit report.