FAQ – How Long after a Short Sale or Pre-Foreclosure before I can Qualify for a Conventional Mortgage Loan?

Deed-in-Lieu of Foreclosure and Preforeclosure Sale


Even though your mortgage payment may have never been late, these transaction types are completed as alternatives to foreclosure therefore, as you might imagine,  they are treated seriously. So serious that they often are viewed by underwriters just as serious as an actual foreclosure or bankruptcy.

A deed-in-lieu of foreclosure is a transaction in which the deed to the real property is transferred back to the servicer. A preforeclosure sale or short sale is the sale of a property in lieu of a foreclosure resulting in a payoff of less than the total amount owed, which was pre-approved by the servicer.

The following waiting period requirements apply:

FNMA Short-Sale LTV MAtrix

Exceptions for Extenuating Circumstances

A two-year waiting period is permitted if extenuating circumstances can be documented, with maximum LTV ratios of the lesser of 90% or the maximum LTV ratios for the transaction per the Eligibility Matrix. However extenuating circumstances require a review of the circumstances. Divorce is NOT an extenuating circumstance!

Ricardo Cobos is a Mortgage Loan Officer in Raleigh North Carolina expertly assisting financing homes with  low interest rates and low down payment Conventional, FHA and VA mortgage loans for move up buyers and first time home buyers alike. Call me at (919)526-0183  or email me your questions , I’m here to help!