That’s right! In 365 days, aka 1 year after a Short Sale you will be eligible for an FHA loan in Jacksonville or Ponte Vedra Florida!
This is a recent underwriting change that affects people who have had a Foreclosure, Short Sale, or Bankruptcy. Previously you had to wait 3 years after a Short Sale or Foreclosure and 2 years after a bankruptcy. Seems that would have been in reverse, but at the time the federal government deemed short sellers to be a bigger threat to FHA than Bankruptcy. I always thought this was odd …. but now it doesn’t matter, both are just 1 year.
Jacksonville FHA Limits = $387,500. That’s a lot of purchase power!
A few caveats: FHA is allowing for the consideration of borrowers who experienced an “Economic Event” and can document:
- certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control;
- the borrower has demonstrated full recovery from the event; and,
- the borrower has completed housing counseling. (a couple hours in a class)
Most of my customers who opt to short sale or file bankruptcy and then short sale, all swear off real estate ownership for life. In almost all cases, most of those previous clients have started entering back into the market and started shopping for a home again. This new underwriting guideline will help so many people re-enter the market at a heavily reduced price point both in purchase price and mortgage rate.
Will this create an even bigger flood of home buyers hitting the market? What will this do to an already under-supplied housing inventory? Will this re-energize the “new bubble” talks? Who knows, but the one thing I can tell you: These OBB’s, Once Burned Buyers, are a lot more critical of the homes and locations than they probably once were. Location, location, location.