Credit Re-Establishment Periods for Mortgages

Short Sales

Required Credit Re-Establishment Periods for Mortgages after derogatory credit:

Short Sales (Deed in Lieu of Foreclosure)

Loan TypeWaiting Period
Conventional (Fannie Mae, Freddie Mac)4 years
FHA3 Yrs from Sale
Exception: No Wait – If No Lates Prior to Short Sale & no lates on installment debts for prior 12 months
VA2 years from sale if borrower not delinquent at time of transfer
3 years from sale if borrower was delinquent at time of transfer
USDA3 years from sale

Foreclosures

Loan TypeWaiting Period
Conventional (Fannie Mae, Freddie Mac)7 years from recorded date (if discharged thru BK – 4 Yrs.)
FHA3 Yrs from Trustee’s Deed (if no sales price or date, use recording date)
VA3 years from recorded date
7 years for High Balance Loans
USDA3 years from recorded date

Loan Modifications

Loan TypeWaiting Period
Conventional (Fannie Mae, Freddie Mac)2 years if no principal reduction and have met the modification terms
FHANo wait with DU/LP approval if no principal reduction and have met the modification terms
VANo wait with DU/LP approval and 12 month as agreed payment history
USDA3 years from sale

Chapter 7 Bankruptcy

Loan TypeWaiting Period
Conventional (Fannie Mae, Freddie Mac)4 years from discharge date
5 years if more than BK one filing within the past 7 years
FHA2 years from discharge date
VA2 years from discharge date
7 years for High Balance loans
USDA2 years from discharge date

Chapter 13 Bankruptcy

Loan TypeWaiting Period
Conventional (Fannie Mae, Freddie Mac)2 years from discharge date
4 years from dismissal date
5 years if more than one BK filing within the past 7 years
FHA2 years from discharge date
2 years from dismissal date
Exception: 1 year w/ BK Court & Payment History Approval
VA2 years from discharge date
2 years from dismissal date
Exception: 1 year w/ BK Court & Payment History Approval
USDA3 years from discharge date
3 years from dismissal date