When can I buy a home after a deed in lieu?

Lenders will not offer a loan to an individual associated with a deed in lieu a mortgage for a minimum of three to four years, since the deed in lieu is failing to complete a home loan contract and significantly brings down your credit score. The chances of loan approval increase after a few years, especially if a borrower attempts to rebuild his or her credit score.

FHA is 3 years seasoning required on foreclosure/NOD deed in lieu (extenuating circumstances considered as exception).

Fannie Mae requires four years:

Additional requirements that apply after 4 years up to 7 years following completion date:

• Borrower may purchase a property secured by a principal residence, second home, or investment property with the greater of 10 percent minimum down payment or the minimum down payment required for the transaction.
• Limited-cash-out and cash-out refinance transactions secured by a principal residence, second home, or investment property are permitted pursuant to the eligibility requirements in effect at that time.

Exceptions for Extenuating Circumstances – Deed-in-Lieu of Foreclosure

• 2-year time period from completion date
• The same additional requirements noted above for deed-in-lieu apply after 2 years up to 7 years following completion date.

After a three-four years, it is likely that an individual who has tried to increase his or her credit rating can purchase a home once more.