Sadly, along with low credit scores many folks have also faced Chapter 13, foreclosures and short sales on their homes. Even if they rebuild their credit score over time, these events will have a lasting impact on their ability to purchase a home in the future. But for how long?
In the event of a Chapter 13 bankruptcy, prospective buyers must be in a repayment plan for at least one year to obtain either VA or FHA financing. The following documentation must be provided; copy of repayment plan, complete bankruptcy documents, pay history from court, permission from the court.
In the event of a foreclosure, a prospective buyer must wait a minimum of 3 years to obtain either VA or FHA finanicng and 5 years for conventional financing.
In the event of a short sale, both VA and FHA financing is avaialble on a case by case basis. However, prospective buyers should be aware that short sales will now be listed on credit reports which will have a significant impact on their ability to purchase a home.
