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Fannie Mae Announces shorter waiting periods to purchase a home for Previously distressed home sellers

by Jamie Namock on July 15, 2014

Big News

Fannie Mae recently announced that the waiting period to finance a home after a short sale or pre-foreclosure sale is changing on August 16, 2014.

The waiting period requirement for borrowers who have had a previous deed-in-lieu of foreclosure or a pre-foreclosure sale/short sale has been reduced from 7 years to 4 years. Loans with 80% LTV/CLTV were previously allowed after 2 years; however, this is now only allowed with documented extenuating circumstances, but at the maximum LTV/CLTV. Four years is the new required waiting time, but the LTV restriction has been removed and maximum LTV/CLTVs are available.

Waiting Periods Under the Old Guideline:
7 years from the date the deed to the property was transferred back to the servicer.
New Guidline:
4 years from the date the deed to the property was transferred back to the servicer. No LTV/CLTV limitations.

Old Guidline:
4 years from the date the deed to the property was transferred back to the servicer. Maximum 90% LTV/CLTV.
New Guidline:
4 years from the date the deed to the property was transferred back to the servicer. No LTV/CLTV limitations.

Old Guideline:
2 years from the date the deed to the property was transferred back to the servicer. Maximum 80% LTV/CLTV.
New Guideline:
4 years from the date the deed to the property was transferred back to the servicer. No LTV/CLTV limitations.

Old Guideline:
A 2-year waiting period up to 90% LTV/CLTV permitted if extenuating circumstances could be documented.
New Guideline:
A 2-year waiting period will be permitted if extenuating circumstances can be documented. No LTV/CLTV limitations.

If you have any questions please do not hesitate to call.

602-740-0747

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