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What is the seasoning requirement for a short sale with a VA loan?

We will be at the 2 year point shortly and want to work with a VA lender with the 2 year requirement. by jan4hh_606_878 from Leesburg, Virginia. Feb 8th 2013 Reply


Steven Ceceri (CreativeFinancingOptionsGroup)
#36 ranked lender in Massachusetts - 723 contributions

Hi Jan! Here is the information from just one of our lenders we work with: Short Sale Borrowers are eligible, subject to all of the following documentation: 1) Borrower must have made all mortgage and installment payments within the month due for the 12 month period prior to the short sale 2) The servicer must not have required the borrower to pay the difference between the mortgage balance and the short payoff 3) Borrowers in default on the mortgage at the time of the short sale are ineligible for VA financing for at least two years from the date of theshort sale 4) Borrowers may not use short sale to take advantage of declining market and purchase, at a reduced price, a similar or superior property 5) Borrowers may not have had a previous bankruptcy or foreclosure.I'd be happy to look at your specific situation directly with a full file and can have it reviewed by our in-house underwriter and/or lender account representatives for any outside sources of lending opportunities. I'm happy to help. www.123LoanYes.com

Feb 8th 2013
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Scott Kinne (Skinne)
#29 ranked lender in Virginia - 70 contributions

Just to clarify things, VA does NOT HAVE a short sale waiting requirement! However, some investors have what are referred to as "Overlays" that can tighten down guidelines and therefore THEY are putting on the restriction, NOT the VA. There are lenders in the market who do not put any Overlays on top of VA's guidelines and you could obtain financing without waiting 2, or even 1 year. Unfortunately, we are not currently licensed to do business in SC. Scott Kinne - First Heritage Mortgage - NMLS# 182351 703-293-6146

Feb 8th 2013
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,588 contributions

So, as you can see by the multitude of answers that everyone has a different opinion.. so here's the scoop... VA will allow for a purchase after a short sale without any waiting period at all so long as there were no late payments and you're not taking advantage of the market.. Otherwise it's 2 years, but VA does not lend money,,, they only insure loans against default.. The lenders or those with the $$$ have their own guidelines, and most will require 3 years... FHA will also allow for a purchase directly after a short sale, but you cannot be taking advantage of the market, and there has to be an acceptable reason for the short sale.. (Had to transfer for job, or had to move closer to a sick relative, etc.. )... Otherwise it's 3 years.. Conventional financing will allow for a purchase after a short sale with a 2 year waiting period if you're putting 20% down or more.. Otherwise it's 4 years with 10% or more down... so the problem is your dealing with several different guidelines.. VA, FHA, USDA, Conforming guidelines, coupled with the individual lenders' guidelines.. If you're asking about a construction loan.. You opening up a whole different can of worms... which will make finding your loan even more difficult.. Try reaching out to a local mortgage broker and apply with them. Do not use the local "Big" bank, or one of those 50 states internet lenders or nationwide lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Feb 8th 2013
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Chris Davenport (todaylending)
#20 ranked lender in Oklahoma - 36 contributions

Same two years. http://www.todaylending.com/vaLoans.php

Feb 8th 2013
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Brian Mayer (usdaloans)
#40 ranked lender in Maryland - 30 contributions

We are a 2 year lender http://www.maryland-va-loans.com and we do Virginia as well.

Feb 8th 2013
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Thank you! I will be in touch with you shortly to follow up

Feb 8th 2013
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We will are looking for a home in SC with the VA loan. We also want to do a VA construction loan, but it is hard to find a lender. Does anyone do VA construction loans in this market? How can we build a custom home with a VA loan?

Feb 8th 2013
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Steven Ceceri (CreativeFinancingOptionsGroup)
#36 ranked lender in Massachusetts - 723 contributions

VA does allow for this program, but a lender would need to offer this program. I would have to check directly with some lenders on this, but you should really get to the point that you are "credit qualified" first, which involves completing an application and having your credit run. Minimum Credit Scores are required and the New Construction product, if offered, may be even more stringent for qualifications.

Feb 8th 2013
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,237 contributions

Unless you meet all the guidelines laid out by the first person above you won't get approved for the VA loan until it has been 3 years. Construction financing with a VA loan is virtually unheard of because it is considered quite risky and most construction financing requires 10-20% downpayment. I'm in SC, when you are ready I'll be happy to review your situation and discuss options.

Feb 8th 2013
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Joe Shamie (Joe Shamie)
#4 ranked lender in New Jersey - 1,412 contributions

2 years

Feb 8th 2013
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John Schweer (johnschweer)
#9 ranked lender in Missouri - 163 contributions

scott kinney's answer was correct.... the bigger question i have is was your previous loan a VA?..... because if it was you will need to make restitution to the VA if they paid out..... Id be happy to discuss it further, im a fellow veteran and have 14 yrs in the industry... being licenced in all 50 states.... click on my photo to the left for all my contact information

Feb 8th 2013
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Thank you for all of the expert advice and perspective on the way forward. The previous loan was not a VA loan

Feb 8th 2013
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