Hoping to buy again soon after foreclosure

Counting the years until you can buy after foreclosure.

Somewhere in all of this, your questions changed direction. For months, every search you ran was about stopping something or surviving something. This one is about starting over. You want to be a homeowner again, and you want to know how long that is going to take. I see that and I promise, you will be able to own your own home again. There is no lifetime mark, no list you were added to, no rule anywhere that says a person who lost a home does not get another one. What stands between you and the next set of keys is a waiting period. And that period mostly comes to the path you chose to take.

The relief that seven is not your only number

Every wait below is set by the next loan, the one you will apply for, not the one you lost. The loan that foreclosed mostly does not matter, with one exception at the bottom of this list. Seven years is real, and if a new conventional loan is the one you pictured yourself signing, you are allowed to hate that number. But it belongs to that one loan type, and every road below it is shorter:

• A new conventional loan: seven years from the day the foreclosure completed. But, with documented extenuating circumstances: a one-time event beyond your control that crashed your income or your debts, it drops to three. The three-year version needs at least 10 percent down and a home you will live in; second homes and cash-out refinances wait for year seven.

• A new FHA loan: three years, from the day ownership of the old home transferred to the day your lender opens your FHA file. It can bend below three for a documented circumstance beyond your control, like serious illness or the death of a wage earner, if your credit has been rebuilt since. Unfortunately, divorce and a job transfer do not qualify here.

• A new USDA loan: a 36-month review window, not a wall. A foreclosure inside it flags your file for a closer look and more documentation, not an automatic no (7 CFR 3555.151(i)).

• A new VA loan: the shortest road. A lender may disregard a foreclosure finalized more than two years before your new closing, and inside one to two years approval takes rebuilt credit plus a cause beyond your control. Here is the one place the OLD loan matters: if the loan you lost was itself a VA loan, restoring your full entitlement means paying back what VA lost on the last one, and a VA loan technician can tell you that exact number.

Finding out you have already been waiting

Here is the quiet good news inside all these clocks: none of them start today. They start when the foreclosure completed. Fannie Mae measures from the completion date of the foreclosure action, as it appears on your credit report or your foreclosure paperwork. Completion also comes sooner than people assume. In Colorado, title usually leaves your name at the close of the eighth business day after the foreclosure sale (CRS 38-38-501(1)). So if your sale is behind you, you are not standing at a starting line.

If your ending is not written yet

Some of you are reading this before the sale, looking past the ending to see what kind of restart it leaves. You are holding something the numbers above reward: the ending is not chosen yet, and different endings carry different waits. On the conventional side, leaving through a deed-in-lieu or a short sale carries a four-year wait instead of seven, and two with documented extenuating circumstances. FHA generally asks three years after a short sale too, yet if every mortgage and installment payment was made on time for the twelve months before it, there may be no wait at all. I am not telling you which door to take. I am telling you the door you leave through helps decide how soon you come back. And if you avoid each of these entirely and sell on your own terms you have no waiting period whatsoever. We at Transitus are happy to show you your options if this is the best path for you.

The person with keys again

You lost more than an address in this. You lost the version of yourself that had keys, and you came here asking when you get to be that person again. That person is not gone. They are just waiting with you. I hope the years move fast, and I hope the next door you unlock is yours forever.

This article is general information from Transitus, not legal, financial, or tax advice. Foreclosure rules change and every situation is different. Transitus is not a foreclosure consultant (CRS 6-1-1103) and charges no upfront fees. For free help, call the Colorado Foreclosure Hotline at 1-877-601-HOPE or consult a Colorado real estate attorney.