Millions of families have been forced out of their homes due to foreclosure since the housing market crashed back in 2007. The emotional and financial consequences of this event can be devastating, but the fact is most foreclosure victims will eventually seek homeownership.

Fannie Mae controls much of the mortgage market and decides how soon a borrower can attain conventional financing after enduring a foreclosure. Most people will be ineligible for a new FHA mortgage for at least 3 years after foreclosure, whereas conventional financing waiting period can be as long as 3-7 years. If the foreclosure was a result of an “extenuating circumstance,” Fannie Mae may allow financing in as little as 3 years, rather than 7. These rules apply to mortgages sold on the secondary mortgage market and most lenders have little control to avoid these rulings.

It’s not always as simple as waiting out the required time period before you will be eligible for a mortgage. You must be diligent and work on rebuilding your credit rating and managing other debts on time. However, if you have recently gone through a foreclosure or short sale and want to explore other options to attain a mortgage as soon as possible, you may want to inquire about a possible portfolio loan to help you achieve your goal.

To accommodate prospective homebuyers who are financially stable and have significant income and assets, a portfolio loan (i.e. a mortgage not sold on the secondary mortgage market) can be available immediately after a foreclosure, short sale or deed in lieu. This special program requires a large down payment and is available only for certain loan amounts.

-You may be eligible for a jumbo loan immediately after foreclosure if you meet the following criteria:

  • Required down payment is 30% (at least 10% must be from personal funds and up to 20% can be Pledged assets or Cross-collateralization)
  • Credit score must be at least 680 (each loan is done on a case-by-case basis)
  • Minimum loan amount is $350,000 – maximum loan amount is $10,000,000
  • Requires 40% down payment for interest-only option
  • Home can be a primary residence, second or investment property
  • If debt to income ratio is high, asset depletion option available to help qualify
  • This jumbo loan portfolio program requires you to have money saved in retirement, checking, savings or brokerage accounts after the 30% down payment

Please feel free to contact us at (800) 779-4547. Remember this is NOT a hard money loan, this is a portfolio loan from a direct lender.

Erik Sandstrom
LoanSafe's Mortgage Expert
I'm a Senior Loan Officer and LoanSafe mortgage expert. If you need a live rate quote, or need help getting a new mortgage, please call me direct anytime at 619-379-8999.