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Fannie Mae – Shortens Wait Period to Buy after Short-Sale

“To support overall market stability and reinforce the importance of borrowers working with their servicers when they are in difficulty”, Fannie Mae is updating their policies regarding the future eligibility of borrowers to obtain a new mortgage after experiencing a short-sale.  Effective on July 1, the “waiting period” (amount of time that must elapse after the short-sale) before a borrower can purchase a new home is being reduced to 2 years with a down payment of 20%, or 4 years with a down payment of 10%.  Borrowers who have short-sales due to “extenuating circumstances” beyond their control – such as loss of job, illness or divorce – can put as little as 10% down payment after only two years.  Borrowers must be purchasing a primary residence and must have well-established credit.  Fannie Mae said the current waiting period for borrowers with foreclosures will remain in effect.  Borrowers with foreclosures must wait 5 years before they can purchase a primary residence with a 20% down payment.

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