After a Short Sale: When Can I Buy a House

Tip: If you want to buy a house as soon as possible, you may be able to qualify for a non-traditional loan (like a Non-QM loan) or provide a larger down payment to offset lender risk.

How Extenuating Circumstances Can Reduce Your Waiting Period

If your short sale was due to unforeseen circumstances beyond your control, some lenders may shorten the waiting period. Common qualifying extenuating circumstances include:

✔ Serious medical emergency or illness

✔ Job loss or significant income reduction

✔ Death of a primary wage earner

✔ Natural disaster or accident

To qualify for a reduced waiting period, you must:

• Provide documentation proving the hardship
• Show recovery through stable income and improved credit

💡 Example: If you lost your job during a recession but found stable employment and rebuilt your credit, you may qualify for a conventional loan in 2 years instead of 4.

How to Rebuild Your Credit and Qualify for a Mortgage Faster

Even after the required waiting period, lenders will closely evaluate your financial health before approving a mortgage. Follow these steps to increase your chances of qualifying sooner:

1. Improve Your Credit Score

A short sale lowers your credit score, but you can rebuild it by:

✔ Paying all bills on time

✔ Keeping credit card balances below 30% of the limit

✔ Avoiding new debt or late payments

🔹 Pro Tip: Check your credit report for errors and dispute any inaccuracies.

2. Save for a Larger Down Payment

A larger down payment reduces the lender’s risk and increases your chances of approval. Consider saving:

✔ 10–20% down for conventional loans

✔ 3.5% down for FHA loans

✔ 0% down for VA loans (if eligible)

3. Maintain Stable Employment & Income

Lenders prefer borrowers with consistent income for at least 2 years. If you’re self-employed, keep detailed tax returns and financial records to show stability.

4. Avoid Applying for Too Much Credit

Each new credit application triggers a hard inquiry, temporarily lowering your score. Limit credit applications before applying for a mortgage.

5. Work With an Experienced Mortgage Broker or Attorney

A real estate attorney or mortgage broker can help you explore loan programs designed for post-short sale buyers and ensure you meet lender requirements.

Which Mortgage is Best After a Short Sale?

Your best mortgage option depends on your financial recovery and waiting period:

✔ Conventional Loan: Ideal for buyers with a strong credit score and large down payment after the waiting period.

✔ FHA Loan: Great for those with lower credit scores and smaller down payments.

✔ VA Loan: The best option for eligible veterans, with no down payment required.

✔ Non-QM Loan: A flexible option for those who don’t meet traditional loan criteria.

📌 Important: Some lenders impose stricter requirements than federal guidelines. Comparing multiple lenders will help you find the best terms.

Can You Buy a House Immediately After a Short Sale?

Yes, but only through special financing programs or if you can pay cash. Some non-traditional lenders offer high-interest loans with no waiting period, but they typically require:

• A larger down payment (15–30%)
• Higher interest rates
• Proof of financial recovery

If you have access to private financing or alternative funding sources, you may be able to buy a home immediately after a short sale.

Conclusion

A short sale doesn’t mean you’ll never own a home again—it just means you need a strategy to rebuild your financial profile and qualify for a mortgage.

📅 Typical waiting periods range from 2 to 4 years, but extenuating circumstances or alternative loan programs can help you buy a house sooner.

At J. Singer Law Group, we specialize in helping New York homeowners navigate short sales and prepare for future homeownership. If you need legal advice or mortgage planning, contact us today for a consultation!

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