Andi Grant's Blog - Everyday Real Estate with a Twist

Is this true? Was there a Home Raffle for ex-short sale sellers that we weren't made aware of?  Within two days, I've read blogs from informed colleagues Judy Chapman and Elizabeth Weintraub both confirming that previous short sale clients were able to obtain legitimate FHA financed loans WITHIN MONTHS of their closed short sales based on certain criteria:  

Pg. 2 Excerpts of pages from FHA mortgage letter

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BORROWERS ARE CONSIDERED ELIGIBLE for a new FHA-insured mortgage if

• they were CURRENT on their mortgage and other installment debts at the time of the short sale of their previously owned property, and

• the proceeds from the short sale serve as payment in full.

Reference: 

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BORROWERS ARE NOT ELIGIBLE FOR A NEW FHA MORTGAGE if they pursued a short sale agreement on his or her principal residence simply to

• take advantage of declining market conditions, and

• purchase, at a reduced price, a similar or superior property within a reasonable commuting distance. 

Reference:  For detailed information on converting existing principal residences into rental properties, see 4155.1 4.E.4.g

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BORROWERS IN DEFAULT ON THEIR MORTGAGE AT THE TIME OF THEIR SHORT SALE ARE NOT ELIGIBLE for a new FHA-insured mortgage for three years from the date of the pre-foreclosure sale. Lenders may make exceptions to this rule under certain circumstances.

Reference:  For detailed information, see "Short Sales", at 4155.1 4.C.2.l. 

 Full 6 pg. Dept of Housing and Urban Development Letter detail the criteria. 

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IS THERE A CATCH?

There are certain variables to take into consideration when determining whether or not you will qualify that aren't listed above.  Was your closed short sale a FHA-insured loan in which you may have been required to be 31 days delinquent or more prior to short sale approval consideration?  Was your short sale due to job relocation or other legitimate reason to have to move?  How was your lender approved short sale reported on your credit report?  What was your final set of FICOs after the next credit bureau reporting cycle? etc.  Do not hesitate to call me for more information at 310-508-4354 or check with a recommended FHA lender professional to see if you qualify.

Also, I can't help but feel betwixt for the FHA short sellers who may have been encouraged to be in arrears in order to obtain FHA short sale approval based on eligibility section of Preforeclosure Sales Program Guidelines.  This same FHA institution will now allow the conventional loan short sellers to get a 2nd chance by rewarding them for not being late on payments? Is it because conventional loans required a lot more personal down-payment from the conventional borrowers than FHA borrowers?  Hmmm...

Well, it is great news for some borrowers, so I guess we just have to be VERY thankful for that!