Over the last five years or so, there were an increased number of short sales because of negative economic situations for millions of people. For many people, these foreclosures and short sales have ruined their credit and made it extremely difficult to get back into a home.

Previously the Federal Housing Administration (FHA) requirements for getting into a home after a bankruptcy or foreclosure was between two to three years. With the revised rules, a borrower may now qualify for an FHA backed loan after 12 months from the time of the discharge of the bankruptcy or foreclosure.

There are some stipulations in order to qualify for an FHA backed loan after only 12 months. First the borrower needs to prove that the foreclosure or bankruptcy was a result of external economic factors that reduced income by at least 20% for six months or more. After meeting that requirement, then the borrower needs to show that during at least the last 12 months, they have been making all their rent and credit payments on time.

The FHA change is designed to help people who were negatively impacted by economic circumstances outside their control, while maintaining stringent requirements for people who poorly managed their finances.

If you ever have any questions about when you can qualify for a loan, feel free to give your mortgage broker a call. Of course we have experts that are trained to help answer your questions as well.


Creekside Mortgage, Inc is staffed with professional loan officers that are ready to help you get into your new home. Give us a call today at 1.800.920.5420.