Orange County FHA, VA & First Time Buyer Loan Information: Getting a VA Loan After a Foreclosure or Short Sale

My goal is to provide valuable information for home buyers, both First Time Buyers and Move Up Buyers. This information will be about loan programs such as FHA ,VA, Conventional Fannie Mae and Freddie Mac, Reverse Mortgages, and even Portfolio Jumbo programs. I will also touch on tax advantages of homeownership, Rent vs. Own analysis, and any other aspect of loans and home ownership that will be of interest to Orange County home buyers and homeowners.

Getting a VA Loan After a Foreclosure or Short Sale

The VA home loan program has very flexible credit standards when it comes to Veterans with a foreclosure or short sale. A foreclosure or short sale is not the end of the world, and the truth is that within only two years a Veteran can become a home owner again.

Buy a Home Two Years after Foreclosure

While most other loan programs require wait periods ranging from 3 years to as many as 7 years for post foreclosure financing, along with a significant down payment, a Veteran with full VA Loan Entitlement can buy a home with no down payment only two years after a significant derogatory credit "event" like a foreclosure, short sale, or even a bankruptcy. There are a few things the Veteran should be aware of if they intend to buy a home soon losing a home.

  • Is their VA home loan entitlement still intact? - if the foreclosure was on a VA loan, then the Veterans entitlement may be effected. They will need to get a Certificate of Eligibility which will show how much entitlement they have remaining. This will effect the Veterans ability to purchase with no down payment and will also effect the loan size, depending on the amount of the loss to VA. A VA lender can help to quickly retrieve the Certificate of Eligibility.
  • Has the Veteran re-established their credit? - it is important after a major derogatory event to re-establish credit. Some people have a tendency to stay away from credit altogether. But if they intend to buy another home, they should carefully restore their credit, and make sure to not have ANY late payments after the "event". 

Buy a Home with Zero Down in Orange County to $668,750 Two Years After Foreclosure

The amazing thing about VA is not only the fact that the credit guidelines are so flexible, but also that the loan limits for zero down financing in high cost areas like Orange County are so high. The VA loan limits do change each year, but currently in the year 2013, the zero down loan limit is $668,750. It is important to note that many lenders have "overlays" to the standard VA home loan guidelines and will not allow financing 2 years after a short sale or foreclosure when the loan amount is higher than $417,000. In many areas of the country this won't matter to most, but in Orange County, a Veteran may have to do their research before finding a lender allowing maximum financing after a major derogatory event.

The all important first step for an Orange County Veteran re-entering the real estate market is contact a local Orange County VA home loan specialist who can guide them through the loan process. The loan office will be able to provide custom loan scenarios, and in many cases a custom video explaining the loan scenarios. The scenarios should include a breakdown of the purchase price, loan amount, payment (PITI), and closing costs. Getting Pre-Approved for a VA home loan before starting the home buying process is critical if the home buyer want to save time, money, and aggravation.

Authored by Tim Storm, an Orange County, CA Mortgage Loan Officer MLO 223456 - Please contact my office at Home Point Financial. Direct line at 949-640-3102.

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Comment balloon 0 commentsTim Storm • November 19 2013 09:29AM