Yes, it is possible to buy a home after a foreclosure, but only after a certain amount of time has passed. Most lenders these days underwrite their loans to either Fannie Mae or FHA guidelines, and both have a required waiting period before you will be able to qualify for a purchase home loan.
Foreclosure Waiting Period for Fannie Mae Financing
Fannie Mae requires a standard waiting period of seven years after a foreclosure. In other words, once the foreclosure is complete, you'll need to wait at least seven years before you can get a Fannie Mae conventional loan.
You may be able to get the waiting period reduced, but only if you can show that circumstances well beyond your control led directly to the foreclosure. This isn't always easy to accomplish because mortgage underwriters may define "extenuating circumstances" very differently.
Many mortgage lenders prefer not to fool with loans that fall into gray areas in the guidelines because they don't want to be forced to buy back the file over a difference in opinion about what "extenuating circumstances" means.
However, having said that, if circumstances well beyond your control led directly to the foreclosure, it might be worth checking with a few banks to see if you can get approved. It probably will be an uphill battle, but if you're really interested in purchasing a home, it might be worth checking around a bit.
FHA Waiting Period for Foreclosures
Under FHA guidelines, the standard foreclosure waiting period is a less stringent 3 years. FHA also allows for reductions in the waiting period due to extenuating circumstances, but as with the Fannie Mae guidelines, what qualifies can be very subjective and it may be tough to get a lender to approve your loan.
Conclusion
If you had a foreclosure in the past and you're still in the waiting periods, it might not be a bad idea to take some steps to clean up and reestablish your credit. Be sure to pay all your bills on time, pay down debt, and clear up any derogatory items in your credit file. The idea is to get your credit situated so that when the waiting period is over, you'll be in a great position to get a great mortgage deal.
Note that what is presented here is just a very general overview. Lending guidelines can change at any time and other guidelines may apply to your particular situation.
Foreclosure Waiting Period for Fannie Mae Financing
Fannie Mae requires a standard waiting period of seven years after a foreclosure. In other words, once the foreclosure is complete, you'll need to wait at least seven years before you can get a Fannie Mae conventional loan.
You may be able to get the waiting period reduced, but only if you can show that circumstances well beyond your control led directly to the foreclosure. This isn't always easy to accomplish because mortgage underwriters may define "extenuating circumstances" very differently.
Many mortgage lenders prefer not to fool with loans that fall into gray areas in the guidelines because they don't want to be forced to buy back the file over a difference in opinion about what "extenuating circumstances" means.
However, having said that, if circumstances well beyond your control led directly to the foreclosure, it might be worth checking with a few banks to see if you can get approved. It probably will be an uphill battle, but if you're really interested in purchasing a home, it might be worth checking around a bit.
FHA Waiting Period for Foreclosures
Under FHA guidelines, the standard foreclosure waiting period is a less stringent 3 years. FHA also allows for reductions in the waiting period due to extenuating circumstances, but as with the Fannie Mae guidelines, what qualifies can be very subjective and it may be tough to get a lender to approve your loan.
Conclusion
If you had a foreclosure in the past and you're still in the waiting periods, it might not be a bad idea to take some steps to clean up and reestablish your credit. Be sure to pay all your bills on time, pay down debt, and clear up any derogatory items in your credit file. The idea is to get your credit situated so that when the waiting period is over, you'll be in a great position to get a great mortgage deal.
Note that what is presented here is just a very general overview. Lending guidelines can change at any time and other guidelines may apply to your particular situation.
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