Below are the general guidelines that FHA, Fannie Mae and Freddie Mac follow when considering a loan after a short sale or foreclosure in Kansas City

As a Kansas City Realtor who has been heavily involved closing Kansas short sales over the last seven years, one of the questions that I get asked quite often from home sellers involved in a short sale is how long will it take before I will be able to buy a home again.

The answer to this question does not have any clear cut and dry answer. There are quite a few variables involved when trying to figure out when someone will be able to purchase a home after a foreclosure or short sale.

Going through either a short sale or a foreclosure has the potential to seriously impact ones credit.  Government entities Fannie Mae, Freddie Mac, USDA, VA and FHA do not directly loan money to individuals but are the governing body that work with lenders to guarantee loans and free up money to provide mortgages.

Kansas City Banks typically have the authority to lend to whoever they want but will generally follow the guidelines set forth by Fannie Mae, Freddie Mac, FHA, USDA and VA. There are some lenders of course that will take greater risks with some borrowers than others.

Below are the general guidelines that FHA, Fannie Mae and Freddie Mac follow when considering a loan after a short sale or foreclosure:

Short sale with FHA Loan

• Can purchase right away with no mortgage default
• 3 year wait if in default at the closing
• Reduced wait if the borrower has re-established good credit and can show extenuating circumstances

Short Sale With Fannie Mae Loan

• 2 year wait if the borrower puts 20 % down
• 4 year wait if the borrower puts between 10% to 20% down
• 7 year wait if the borrower puts less than 10% down
• 2 year wait if the borrower can show extenuating circumstances and puts more than 10% down

Short Sale with Freddie Mac Loan

• 4 year wait before being able to get a loan
• 2 year wait if the borrower can show extenuating circumstances

Foreclosure with an FHA Loan

• 3 year wait before being able to get a loan
• Reduced wait if the borrower can show extenuating circumstances and re-establishes good credit

Foreclosure with a Fannie Mae Loan

• 7 year wait from the completed foreclosure sale date
• 3 year wait if the borrower can show extenuating circumstances. Additional underwriting requirements apply for 4 years after a 3 year waiting period.
• 7 year wait for a 2nd home, cash out re-financing, or an investment property

Foreclosure with a Freddie Mac Loan

• 5 year wait from the completed foreclosure sale date
• 3 year wait if the borrower can show extenuating circumstances

If you do a Deed in Lieu of Foreclosure, you will not benefit when repurchasing. You'll need to go through the steps of waiting and qualifying as if you went through a real estate foreclosure.

When analyzing the difference between completing a short sale on a Kansas City home or going through a foreclosure in regards to purchasing another property in the future it boils down to the waiting time. If you don't want to wait a few more extra years, I would suggest negotiating a short sale.

Need help qualifying for a mortgage after a short sale or foreclosure, I would suggest contacting Jamie McKeehan from Stonebridge National Mortgage. Jamie can be reached at 913.541.0303 x.123.

Need help negotiating a successful short sale, lets talk. There is a reason we're the most preferred short sale loss mitigation real estate agents in Kansas City.


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Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.com

Blog post written by the Dowell Taggart Team of RE/MAX Best Associates

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