With as many people who have either been through foreclosure, did a deed-in-lieu of foreclosure or short sold their house over the last few years, I had been wondering if Fannie Mae/Freddie Mac/FHA would change their guidelines as to how long someone had to wait before getting another mortgage.
And recently Fannie Mae changed their guidelines where now someone who had a foreclosure or deed-in-lieu of foreclosure can now buy a house and get a Fannie Mae mortgage in as little as two years with a 20% down payment.
That's right - according to the new announcement by Fannie Mae, you can now get a mortgage 2 years after foreclosure.
Prior to this change in policy, if you had a foreclosure you had to wait at least four years until you could qualify under the Fannie Mae guidelines for a mortgage and at least 2 years if you sold your home in a short sale.
The change in policy will go into effect for any loan application taken after June 30, 2010 and the policy will also be updated in the Desktop Underwriter software so your loan officer will be able to render a decision regarding your file on the spot of application.
In my opinion, this is probably a good policy change for the housing market. With as many foreclosures that have happened, there are a large number of future homeowners who are currently renting due to a recent foreclosure and when they start coming back into the market it will help prop up housing prices.
So with the new 2 year rule and a 20% down payment requirement - one thing is clear: if you are going through foreclosure, be sure to save your money... for a down payment on your next home.