New loan waiting periods after deed-in-lieu or short sale

FANNIE MAE has changed the “waiting period” timeline before home buyers can qualify for a new loan after a ‘preforeclosure event,’ namely a deed in lieu or a short sale. 

The terms “short sale” and “preforeclosure sale” have the same meaning in the Fannie Mae Announcement, namely, the sale of a property in lieu of foreclosure that has been pre-approved by the mortgage service resulting in a payoff amount less than the total amount owed by the borrower . Factors that will impact these changes include the required down payment or loan to value (LTV) for the transaction, and whether extenuating circumstances contributed to the individual’s prior financial hardship situation (e.g. job loss).

The new waiting periods for borrowers who have given a deed in lieu of foreclosure or are involved in a short sale or preforeclosure sale are:

  • 2 years – 80% maximum LTV ratios
  • 4 years – 90% maximum LTV ratios
  • 7 years – LTV ratios per the Eligibility Matrix

Click here for  Fannie Mae Guidelines Jul10.


  1. The market is horrible out here as well. There needs to be more excellent resources like this one that consumers can rely on.

    1. Hi Providence! Actually the market in the Pacific Northwest is quite good… not great, mind you, but taking all into consideration, it’s got some good aspects. We have two issues… bank-owned and short-sales pulling down the general prices of homes for sale (which is great for Buyers), and, somewhat unexpectedly, not enough homes for sale! Our inventory is less than three months in King County, and less than two months in parts of Microsoft territory east of Lake Washington.

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