Fannie Mae allows financing after short sale

Everyone has their opinion about the impact of a Short Sale on your credit and whether you can get a new mortgage after short selling a home.

To answer these questions we must refer to the current Guidelines for FHA, and Fannie Mae.

FHA has recently changed their rule so that if a borrower has short sold their home and all the payments were made on time, then they may be eligible for a new mortgage. Borrowers are not eligible for a new loan if they pursued a short sale to, take advantage of declining market and purchase at a reduced price a similar or superior property within a reasonable commuting distance. Motivation for new home purchase is subjective and requires careful consideration by the lender. Otherwise, if any payments were made late or you cannot demonstrate extenuating circumstances, then it is a 3 year period before new FHA financing can be considered.


Fannie Mae policy is pretty straight forward – It is a minimum of 2 years to re-establish credit after a short sale.

This is Fannie Mae’s Guideline:
Link to more information from Fannie Mae.