Would I be able to buy a home in the future using a new FHA mortage?
FHA (Federal Housing Administration) issued new guidance to help responsible borrowers who did not fully payoff their mortgage due to extenuating circumstances gain access to FHA financing. Borrowers are considered eligible for a new FHA-insured mortgage if: 1) they were current on their previous mortgage and other debts at the time of the short sale and 2) if the proceeds from the short sale serve as payment in full. We also stated that borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement to take advantage of declining market conditions, or to purchase another property at a reduced price. Additionally, borrowers who execute a short sale while in default on their mortgage are not eligible for a FHA-insured mortgage for three years from the date of the sale. Lenders, however, can make exceptions if the default was due to circumstances beyond the borrower’s control, such as the death of the primary wage earner.
