Home Buying After Foreclosure

home buying

If you think that once your home goes into foreclosure that you will never be able to own a home again you are wrong. There are guidelines and wait periods however and those are listed below. If you do have to go through a foreclosure realize that it is not the end of the world and that there is light at the end of the tunnel. It may be easy for you to give up and settle for renting the rest of your life but you do not have to. Become a home owner again with just a few steps that need to be taken.

  • All mortgage loan types require a waiting period once you have gone through foreclosure but those waiting periods vary. If you have a conventional loan backed by Freddie-Mac or Fannie Mae you are going to have to wait the longest period of time before getting another loan as these loans require that you wait 7 years from completion. Most conventional loans will also require a good debt to income ratio before you can apply for a new loan.
  • VA loans, which are the Department of Veterans Affairs backed loans, only require that you wait a period of two years before applying for a new home loan. Only folks who have served or are serving in the military can apply for these types of loans however.
  • FHA loans, Federal Housing Authority, will allow you to have another home loan as quickly as just a year after your foreclosure if you can prove that the situation that caused your foreclosure was out of your control such as a job loss or a medical issue. If you are unable to provide the needed proof of these types of circumstances you will have to wait three years to get another FHA loan.

The best advice that you can take if you have gone through a foreclosure is to take the needed time to improve your credit. Be sure to pay all of your bills on time, or better yet pay them early. Get your debt to income ratio in good shape and perhaps find a position in a company that pays you well enough to be able to afford to pay a good down payment. Keep in mind as mentioned before that once you have gone through a foreclosure it doesn’t mean that you can never own a home again. Don’t give up and keep pressing forward and you may find that you own your own home again sooner than you may have thought possible.


Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!


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