Typical waiting periods
Waiting periods usually run from the date the foreclosure was completed. Program rules change, so treat these as general guides:
- Conventional: often 7 years
- FHA: often 3 years
- VA: often 2 years
Short sales and deeds-in-lieu
A short sale (selling for less than you owe, with the lender's approval) or a deed-in-lieu (handing the home back to the lender) is often treated more gently than a foreclosure. Waits for these are frequently shorter, but they vary by program.
Extenuating circumstances
Some programs shorten the wait when the foreclosure resulted from events outside your control, such as a serious illness, a job loss or a death in the family. Expect to document what happened and show that your finances have recovered.
Co-borrowers and the waiting period
The waiting period applies to each borrower who went through the foreclosure. Adding a co-borrower with clean credit doesn't usually remove the wait for the borrower who had it.
Rebuild while you wait
- Make on-time payments on rent, cards and loans
- Keep credit card balances low compared with their limits
- Check your credit reports for errors related to the old mortgage
- Save for a down payment and a cushion of reserves
What lenders will ask for
Expect to provide the foreclosure date, a short letter explaining the cause and how your situation has changed, and the usual income and asset documents.
Planning your timeline
Mark the date your foreclosure was completed and count forward using the waiting period for the loan type you expect to use. Start talking with a loan consultant a few months before that date, so you can fix credit report errors and gather documents early.
If your timeline is long, consider renting somewhere that reports on-time payments to the credit bureaus. It adds positive history while you wait.
Getting started with CapCenter
You need a credit score of at least 620 for a CapCenter loan. A pre-approval starts with a soft credit check, so you can see where you stand without affecting your score.