The good news is foreclosure does not kill the dream of future homeownership. In fact, it’s common for a former homeowner to see a future mortgage after a foreclosure. Of course, it will take more time and prove more difficult, yet it’s not unheard of. Even if a bankruptcy wasn’t involved in the former owner’s loss of the home, most lenders require a waiting period before considering a loan application from an individual whose home was foreclosed. If foreclosed owners can explain the extenuating circumstances were beyond their control, the waiting period may be shorter. Situations that could be considered factors include death, illness, job transfer, or an accident that results in severe injury. If extenuating circumstances have been documented, the number of years one has to wait for a conventional loan could be directly impacted. A federally insured FHA loan is considered one of the best options for obtaining a mortgage after foreclosure. The minimum amount of time required between completion of foreclosure until approval of an FHA loan is three years. This is regardless of extenuating circumstances, and borrowers will still need to prove that they are up to date on bill payments after the foreclosure to get approved.
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