How Long After Foreclosure Can I Get an FHA Mortgage?

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As homeowners continue struggling with foreclosures and mortgage defaults, Money Management International (MMI), the nation’s largest nonprofit, full-service credit counseling agency, is reminding consumers of the many tools and financial education resources available to helpfight back against foreclosure and keep their piece of the American Dream.

As more American families struggle with mortgage delinquency, there are calls formore scrutiny of banks and lenders, and for the government to do something about it. Some predict improvement; others say it could get worse. Whatever the case, more and more homeowners are struggling to make ends meet and find a way to hold on to their most valuable asset – their home.

“Our nation’s foreclosure crisis continues to be one of the most damaging aspects of the current down economy,” said Kim McGrigg, community manager for MMI. “Losing a home is more than a financial issue; it is one of the most scary and emotionally draining experiences a family can face. The far-reaching impact can be felt well into the future. At MMI, we’re using our years of experience to help families fight back against foreclosure.”

But what if, after ever thing to do to save your home, you realize that, for your own mental health, you have to let it go.  Then what?

IDECLAIR

Category: asked July 22, 2011
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Several of my  listeners who have been hit hard by the sluggish economy or a job lose, have asked how long after foreclosure can they buy another house.  The  good news is, they are planning their future.  The bad news it may be up to three years.

At Least Three Years

Generally, borrowers who had their principal residence or any other real estate foreclosed upon within the past three years are ineligible for a mortgage insured by the Federal Housing Administration, according to FHA Handbook 4155.1. The borrower must reestablish sufficient credit after the foreclosure to meet the FHA’s minimum credit requirements.

Extenuating Circumstances Exceptions

A borrower may purchase a home less than three years after a foreclosure if he can document that extenuating circumstances led to the foreclosure. Qualifying circumstances are considered beyond the control of the borrower, according to the FHA Handbook. They include serious illness or death of the wage earner. Divorce or inability to sell the home for job relocation purposes are not considered extenuating circumstances.

Bottom Line

The FHA will consider applications three years from the date of the foreclosure or trustee sale date. The trustee sale is the auction conducted by the lender. In some areas, it’s known as a sheriff’s sale. A borrower may qualify after less time has passed if the foreclosure resulted from death or illness of one of the wage-earning borrowers on the loan.

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