FHA : "Ignore" Foreclosures, Bankruptcy, Short Sales?Major derogatory events include foreclosure, short sale, and Chapter 7 bankruptcy. Current guidelines require a mandatory waiting period of each of the following events, assuming credit has been re-established by the borrower :
- Foreclosure : Waiting period of 3 years since sale date of foreclosure before eligible for FHA-insured financing
- Short Sale : Must wait 3 years from consummation of short sale closing before eligible for FHA-insured financing
- Chapter 7 Bankruptcy : Must wait 2 years from Bankruptcy discharge before eligible for FHA-insured financing
The FHA's new waiver on foreclosures, short sales and bankruptcies would add to the national pool of home buyers, creating buy-side demand for housing and upward pressure for home values nationwide.