How to Qualify for a Fannie Mae Loan After a Short Sale
A two-year waiting period and proof that your finances are back in order are the most important requirements for qualifying for a Fannie Mae loan after a short sale. Fannie Mae is a mortgage finance company backed by the U.S. government. Fannie Mae and a similar agency, Freddie Mac, back about half of all mortgages in the U.S., according to "The Wall Street Journal." A severe U.S. recession and housing bust starting around 2007 forced many people into selling their homes through short sales, meaning the house was sold for less than the balance on the mortgage -- with the lender sometimes being stuck with the loss.
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Instructions
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Reestablish your credit -- if necessary -- to meet Fannie Mae guidelines for new loan applications. Neighborhood Partnership Housing Services, a nonprofit credit counselor approved by the U.S. Department of Housing and Urban Development, reports that the standards include proving that you have paid your rent or mortgage on time for at least the past 12 months and that you have not been late on credit obligations, such as credit cards and car payments, more than twice in the past 24 months.
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Pay at least 20 percent down. You can also pay 10 percent if the short sale was caused by extenuating circumstances, such as joblessness.
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Present documentation explaining your extenuating circumstances, if necessary. Acceptable documentation could include job severance papers, copies of medical bills from an extended illness or copies of a divorce decree explaining circumstances that led to your short sale.
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Tips & Warnings
Fannie Mae will not waive the two-year waiting period following the completion of your short sale, according to Neighborhood Partnership Housing Services. There are no exceptions, according to the agency.
