Foreclosure/Short Sale/Deed-in-Lieu – 4 years must have elapsed – If more than 4 years but less than 7, you can only do a purchase of a primary residence and you must have a 680 middle FICO score with at least 10% down. Please keep in mind; however, if you put less than 20% down you need mortgage insurance and you can’t get mortgage insurance in Nevada without having at least a 720 mid FICO score.

Chapter 7 Bankruptcy – 4 years from discharge or dismissal.

Chapter 13 Bankruptcy – 2 years from discharge or dismissal.

FHA & VA Financing

Foreclosure – 3 years must have elapsed. In FHA’s 4155 Manual it does state that these actions were a result of extenuating circumstances beyond the control of the borrower such as serious illness or death of a wage earner and not due to inability to sell the property because of a job transfer or relocation, and they have reestablished good credit, then an FHA underwriter can make an exception to the 3 year policy. The bottom line is investors (banks) don’t make exceptions, not when we have a national foreclosure and global credit crisis. Moral of the story, if the borrower doesn’t have 3 years seasoning, don’t expect to get an FHA loan.

Deed-in-Lieu – 2 or 3 years must have elapsed depending on automated underwriting findings. Basically, I would take a full application, run credit and then run the loan through FHA’s automated underwriting engine and it would state either 2 or 3 years. We would have to abide by these findings.

Short Sale – 2 years must have elapsed. The underwriter would most likely ask for a HUD-1 on the short sale and the clock would start from the date that transaction closed. I have at times been able to do these depending on if it was reported on the credit report or not and what the statement under the account said.

Chapter 7 Bankruptcy – 2 years from date of discharge or dismissal. Once again, the 4155 Manual does state that as long as at least 12 months have elapsed and the Chapter 7 was due to extenuating circumstances that can be documented and they have reestablished credit with no derogatory credit since, an exception can be made. Investors will also not make exception. If the borrower doesn’t have 2 years, they will not get an FHA loan because no bank will loan the money for FHA to insure.

Chapter 13 Bankruptcy – If the borrower has completed a full 12 months of their payments, and provide proof (cancelled checks for example) of 12 consecutive months of on-time, complete payments, and can get a letter of permission from the bankruptcy trustee, they can get an FHA loan. If not then the Chapter 13 has to be discharged or dismissed.

USDA Financing

Chapter 7 & 13 Bankruptcies – Must be discharged a minimum of 3 years.

Foreclosure/Deed-in-Lieu/Short Sale – 3 years must have elapsed.