Defining Derogatory Credit

Many previous homeowners who may have run into the negative consequences of the recession are looking to get back and become homeowners again.
Please note the various “Derogatory Credit Waiting Periods.”
Short Sale/Deed in Lieu of Foreclosure:
FHA -3 years if in default at time of sale; VA -2 yrs; FNMA if extenuating circumstances may be 2 years; otherwise 4 years; USDA -3 years.
Foreclosure:
FHA -3 years from completion; VA -2 years; FNMA 7 years from completion, 3 if extenuating circumstances; USDA 3 years.
Bankruptcy Chapter 7 or 11:
FHA 2 years from discharge date; VA 1-2 years extenuating or 2 years; FNMA 4 years or 2 extenuating; USDA -3 years from discharge date.
Bankruptcy Chapter 13:
FHA -2 years from discharge date or 1 year payout completed, all payments on time and court allows in writing new mortgage; VA -same as FHA; FNMA – 2-4 years; USDA 1 year similar to FHA.

When it comes to credit make sure you have tri-merged mortgage credit report run and check with your mortgage professional to insure you are ready, willing and able to be mortgage qualified today.
As always we are finding that qualifying ratios may be more flexible than you think but when it comes to credit, the score and your payment history will truly dictate whether or not you will secure mortgage finance.