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Home Purchase after Short Sale, Never Late!

We had to accomplish a short sale on our home in Las Vegas, NV in Oct 2010 due to a forced Military move to Minot, ND.  The mortgage was a 30 year conventional and was never paid late in the 41 months we owned it.  At the time of the sale we did not qualify for federal assistance due to our income levels and we were not eligible for the Military Homeowners Assistance Program due to program eligibility dates.  Neither of these issues were waiverable.  Additionally, Nevada law allows the lender to seek deficiency in a short sale since we have the income to pay it back.  We now carry the balance of our mortgage on a 20 year note to the tune of $75k.  Or credit reflects a short sale but no default or late payments to any creditor since reporting began.  It also reflects that we are paying the shortage. FHA allows a purchaser to buy a home if there were no late payments; default; preforeclosure; and/or foreclosure in the preceding 12 months, but most lenders have stricter requirements.  Is there still a lender for ND mortgages that will lend at FHA guidelines with 5% down.

From FHA ML 09-52; Handbook 4155.1: 4.C.2.I

When a previously owned property was sold for less than what was owed (short sale), borrowers are considered eligible for a FHA insured mortgage if, as of the loan application date, all mortgage and installment debt payments were made within the month due for the twelve months preceding the short sale.

Borrowers that were in default at the time of the short sale (or pre-foreclosure sale) are not eligible for three years from the date of the sale.

Borrowers who pursued a short sale agreement on their principal residence to take advantage of declining market conditions and purchase a similar or superior property within a reasonable commuting distance are not eligible for a new FHA insured mortgage.
  • December 29 2011 - Saint Paul
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