Fannie Mae Policies On Short Sale Through Foreclosure

I often get asked about the difference between the impact of a short sale and a foreclosures.

Here is a summary of Fannie Mae loan policies that went into affect on August 1, 2008.  This represents the time period that must elapse before borrowers can demonstrate they have reestablished an acceptable credit history after the occurrence of the bankruptcy or foreclosure.

• 2 yrs – Pre-foreclosure Sale (aka Short Sale)

• 2 yrs – Bankruptcy Chpt 13 (reorganization) - case discharged (completed)
• 4 yrs – Bankruptcy Chpt 13 (reorganization) - case dismissed (not completed)
• 4 yrs – Bankruptcy – All others, not Chpt 13
• 4 yrs – Deed-in-Lieu of Foreclosure
  ADDITIONAL REQUIREMENTS up to 7 yrs after
  • The greater of 10% down payment or minimum down payment required
  • Limited cash-out refinances
• 5 yrs – Multiplbe Bankruptcy filings
• 5 yrs – Foreclosure
  ADDITIONAL REQUIREMENTS up to 7 yrs after
  • Min 10% down payment and credit score of 680
  • No second homes or investment properties
  • Limited cash-out refinances, but only if eligibility requirements

So you can see that doing a short sale is a huge advantage to sellers.  Please contact me if you know anyone that would benefit from this!

Tagged as: atlanta short sale, benefits of short sale, Fannie Mae, FAQ, Foreclosures, LinkedIn, preforeclosure, Short Sale, Short Sales