Fortunately, the FHA definition of “qualified borrower” is very flexible. As the HUD secretary Ben Carson mentioned its, “Core mission to facilitate safe and affordable mortgage options for qualified borrowers”. Although, using bonus entitlement allows a Veteran to use VA again or even have multiple VA loans at once.ĭuring fiscal year 2018, FHA endorsed 1.06 million loans including 776,284 purchase loans. Keep in mind that if the foreclosure was a VA loan, the loss usually reduces the Veteran’s entitlement. By the way, the same is true for short sales and deed in lieu of foreclosure as well. Whichever date is latest starts the new credit review period. Now VA guidelines state if a foreclosure is in conjunction with a bankruptcy, use the latest of the bankruptcy discharge date or transfer of the home title. Previously, there was confusion on when the re-established credit date starts. Recently, VA provided clarification to some guideline gray areas including a foreclosure in conjunction with a bankruptcy. VA Foreclosure and Bankruptcy Rule Clarification FYI, divorce is not generally considered as beyond control of the borrower. Additionally, the cause must have been beyond the control of the borrower. In order for that to happen, there must be re-established credit. Although, it is possible for VA loan approval after just 1 through 2 years removed from a foreclosure.
Even if the foreclosed loan was a previous VA loan! The foreclosure waiting period is only 2 years. VA loans are the most lenient on previous foreclosures.