Lending
Credit After a Short Sale, Foreclosure or Bankruptcy: When You Can Buy Again
How long late payments, short sales, foreclosures and bankruptcy stay on your credit, and how long each loan type asks you to wait before a new mortgage.
Talk to Maggie directly: cell (916) 549-3131 (text or call) · maggie@loveyoursurroundings.coMaggie B. Hopkins, NMLS #349517 · Surroundings NMLS #2528307
Can I ever buy a home again after this?
This page is general information, not legal or credit advice. Yes, many people do. A short sale, foreclosure or bankruptcy is a hard chapter, not the end of the book. Each loan program sets a waiting period, and the clock starts on a specific date. Knowing that date lets you plan instead of guess.
Maggie B. Hopkins is a mortgage broker, so she can look at your history against several loan programs and lenders, not just one. Below is how each event usually shows on your credit and what each program asks for.
How long do late payments, short sales and foreclosures stay on my credit report?
The CFPB's page on negative information (last reviewed September 2, 2026) says a credit reporting company can generally report most negative information for seven years. That covers late payments and most negative account history. The CFPB says bankruptcies can stay on your report for up to ten years.
The effect usually starts before the event itself. Each missed payment can be reported as late, and a repayment plan may not stop that. The CFPB's repayment plan page (last reviewed January 2, 2025) notes the servicer may still report the delinquency until you're caught up.
No one can promise how many points your score will drop or how fast it will recover. That depends on everything else in your file. You can check your reports for free and dispute anything that's wrong. Our credit scores page explains how scores are built.
How long do I wait for a conventional loan after a short sale or foreclosure?
Fannie Mae's Selling Guide, topic B3-5.3-07 (checked October 22, 2026 in the guide published October 7, 2026), sets these waiting periods:
- Foreclosure: 7 years from the completion date, or 3 years with documented extenuating circumstances.
- Short sale, deed in lieu or mortgage charge-off: 4 years from the completion date, or 2 years with extenuating circumstances.
- Chapter 7 or 11 bankruptcy: 4 years from discharge or dismissal, or 2 years with extenuating circumstances.
- Chapter 13 bankruptcy: 2 years from discharge, or 4 years from dismissal (2 years from dismissal with extenuating circumstances).
- More than one bankruptcy in the past 7 years: 5 years from the most recent discharge or dismissal, or 3 years with extenuating circumstances.
The same topic adds limits on the foreclosure exception. Between 3 and 7 years after a foreclosure, the new loan is limited to buying a principal residence at no more than 90% loan-to-value (or less, if the program requires), or a limited cash-out refinance. Fannie Mae also expects you to have re-established traditional credit. See our conventional loans page for the basics.
How long do I wait for an FHA loan?
HUD Handbook 4000.1 (Update 18, issued August 12, 2026) sets these general rules for FHA loans:
- Foreclosure or deed in lieu: generally 3 years, counted from the date of the deed in lieu or the date you transferred the home to the foreclosing party.
- Short sale: generally 3 years from the date title transferred. There's an exception if every mortgage payment on the old loan, and your installment debts, were paid within the month due for the 12 months before the short sale.
- Chapter 7 bankruptcy: 2 years from discharge. Between 12 months and 2 years may be acceptable if the bankruptcy came from circumstances beyond your control and you've managed money responsibly since.
- Chapter 13 bankruptcy: possible after at least 12 months of on-time plan payments, with written permission from the bankruptcy court.
The handbook lets a lender make an exception to the three-year rule for documented circumstances beyond your control, such as a serious illness or the death of a wage earner, if you've re-established good credit. It says divorce alone is not an extenuating circumstance, with one exception: your loan was current at the divorce, your ex-spouse got the home, and it was later lost. See our FHA loans page.
How long do I wait for a VA loan?
VA's rules lean more on the facts of your story. VA Pamphlet 26-7, Chapter 4 (change date February 22, 2019, checked October 22, 2026) says:
- Foreclosure: a past foreclosure doesn't by itself disqualify you. One finalized more than 2 years before closing may be disregarded. Within 1 to 2 years, approval generally needs both new credit paid well since and a cause beyond your control, such as unemployment or uninsured medical bills.
- Short sale or deed in lieu: if your payments weren't late before it and you were working with your servicer, a waiting period may not be needed.
- Chapter 7 bankruptcy: a discharge more than 2 years before closing may be disregarded. Within 1 to 2 years, the same two conditions apply. Within 12 months it's generally not possible.
- Chapter 13 bankruptcy: a lender may give favorable consideration after at least 12 months of satisfactory payments, with the trustee's or judge's approval.
The same chapter notes that if the lost home had a VA loan, you may not have full entitlement for the next one. See our VA loans page. USDA loans have their own rules, and we'll check the current USDA handbook for your file.
What counts as an extenuating circumstance?
Fannie Mae's Selling Guide, topic B3-5.3-08 (checked October 22, 2026), defines extenuating circumstances as nonrecurring events beyond your control that caused a sudden, significant and prolonged drop in income or a catastrophic increase in what you owed. Examples of proof it lists include medical reports or bills, layoff notices, severance papers and divorce decrees.
The lender also needs a written explanation from you. It should connect the documents to the event and show you had no reasonable choice but to default. It can be a letter or an email. FHA and VA use their own wording, so we read your situation against each program.
What can I do now to rebuild?
- Pull your credit reports and fix errors. Make sure the event and its date are reported correctly. The date drives the waiting period.
- Keep the paperwork. Save the short sale approval letter, the deed, the closing statement, any deficiency waiver and any bankruptcy discharge. Lenders often ask for them.
- Pay every bill on time from here. Each program looks at how you've handled credit since.
- Use a little credit, carefully. Fannie Mae and VA both look for re-established credit. A card you pay in full each month is one simple way.
- Save. A down payment and reserves help any file.
- Write your story down now, while the dates are fresh, in case you need a letter of explanation.
When the date gets close, our pre-approval page shows what a lender will look at.
How do you start planning your next home?
Call (916) 549-3131. Tell us the event, the date and the loan type you're thinking about. We'll map out when you may be able to apply and what to do in the meantime. You can also fill out the loan options form or send us a note.
Still in the middle of it? Start with options if you're behind on payments or how short sales work.
Frequently Asked Questions
How long does a foreclosure stay on my credit report?
The CFPB says most negative information can generally be reported for seven years. Bankruptcies can stay for up to ten years.
Is a short sale better than a foreclosure for buying again?
For a conventional loan, the waits are shorter. Fannie Mae's guide sets four years after a short sale and seven after a foreclosure, before any extenuating-circumstance exceptions. FHA generally sets three years for both, with an exception for some borrowers who were current before the short sale.
How soon after Chapter 7 bankruptcy can I get an FHA loan?
HUD Handbook 4000.1 generally requires two years from discharge. Between 12 months and two years may be acceptable if the bankruptcy came from circumstances beyond your control and you've handled credit responsibly since.
Can I get a VA loan after a foreclosure?
Possibly. VA's Chapter 4 underwriting guidance says a foreclosure doesn't by itself disqualify you. One finalized more than two years before closing may be disregarded, and one within one to two years needs good new credit and a cause beyond your control.
Does divorce count as an extenuating circumstance?
Generally not for FHA, which says divorce alone is not an extenuating circumstance. FHA does allow an exception if your loan was current at the divorce, your ex-spouse got the home and it was later lost. Fannie Mae lists divorce decrees among possible supporting documents.
Will my credit score go back up?
No one can promise a score change or a timeline. What you can control is paying on time, keeping balances low and making sure your reports are accurate.
When does the waiting period start?
It depends on the event and the program. Fannie Mae counts from the completion date or the bankruptcy discharge or dismissal. FHA counts from the title transfer or discharge. Keep the documents that show the date.
Is this page legal or credit advice?
No. It's general information about program rules as of the dates shown. Your lender applies the rules to your own file.
Talk to Maggie directly: cell (916) 549-3131 (text or call) · maggie@loveyoursurroundings.coMaggie B. Hopkins, NMLS #349517 · Surroundings NMLS #2528307
Loans are arranged through Maggie B. Hopkins, NMLS #349517 · Surroundings NMLS #2528307. This is not a commitment to lend. All loans subject to credit approval and property qualification. Equal Housing Lender.
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