Where to Live After Foreclosure

Finding housing after a foreclosure can be difficult, but not impossible. Unless you pay for a house in full using cash, you must rent rather than finance a home. Rental options include apartments, townhouses, condos, and even houses. A difficulty in finding housing arises because landlords often check a prospective tenant's credit history and uncover foreclosure reports. A person who has been foreclosed upon generally represents a high credit risk.

Basics

Search for affordable housing based on your current income so that you avoid getting into significant debt. For example, if you earn $3,000 a month, then find a place that costs less than $1,000, including all expenses like utilities and insurance. You might have to live in a smaller space than you prefer. By finding affordable housing, you should be able to persuade a landlord that you can successfully make your rental payments, based on your income. After reviewing your credit, a landlord might allow you to rent but establish higher safety deposit requirements or offer shorter lease periods.

Options

Besides searching using traditional methods, such as by contacting the manager of an apartment complex or apartmentfinder.com, explore websites like craigslist.com that advertise rentals and sublets. Some landlords who post ads on craigslist do not check tenant credit backgrounds and might base their decisions on intuition. However, especially when renting from individual landlords, evaluate whether the landlord might face foreclosure himself, which could result in your own quick eviction. Another potential avenue to find housing is through the U.S. Department of Housing and Urban Development (HUD). HUD is a federal agency that provides subsidized housing. For instance, HUD can provide housing or Section 8 vouchers so that you can rent from any landlord who accepts the vouchers. HUD also manages public housing, for which HUD is the direct landlord. On the downside, the supply of HUD vouchers and housing is often limited.

Considerations

While searching for a place to live, you might consider temporarily staying with friends or family members. To minimize anxiety, store unnecessary furniture with a self storage company until you can secure a home that's large enough to hold it all.

If you have recently been foreclosed upon, remember to notify your utility companies to shut off service and make sure to pay your final bills in full. If you skip out on your last bill, the utility companies likely will likely refer your debt to a collection agency and report the delinquency to the three credit reporting agencies--which could prevent you from getting utilities elsewhere.

References

• U.S. Housing and Urban Development
• Evicted Renters