Just wanted to share some information in regards to purchasing a home immediately after a short sale. The requirements below are for higher-priced homes and will be more costly then some traditional loan options, but are a great solution for borrowers who have significant funds/assets and would like to buy another home asap.
Keep in mind that it's now possible to obtain an FHA loan just 12 months after a foreclosure or short sale if you can prove that you lost 20 percent or more in income prior to the event. You can more details on this program here.
Portfolio loans after a short sale will require at least 25-30% down and will often come with an adjustable-rate (ARM). The ARM will come with a fixed-rate period of 3-10 years and will be amortized over a 30-year term. The stringent requirements for this program are aimed to ensure the borrower is financially stable enough to qualify for the mortgage and has significant cash reserves if a hardship arises. Below are the basic eligibility requirements for a jumbo (portfolio) loan after a short sale or foreclosure:
- Qualify immediately after short sale or foreclosure
- 30% down payment (at least 10% needs to come from borrower’s personal funds, up to 20% can be a gift, pledged assets or cross-collateralization)
- Borrower must have a 680 credit score
- Minimum loan amount is $350,000/maximum loan amount is $10,000,000
- Interest-only loan available if borrower puts 40% down
- Home can be a primary residence, investment or second home
- ARM available with 5-, 7- and 10-year fixed periods
This program is available exclusively in California, Arizona, Nevada, Florida, Texas, Washington, Oregon, Idaho, Colorado, Wisconsin, Maryland, Virgina, Tennessee, Illinois, Missouri and Hawaii.