FHA Loans for people who have had Utah Short Sales
I get asked frequently what are the guidelines for purchasing a new house with an FHA loan in Utah when someone has had a previous Short sale?
The answer is it depends.
It depends on:
- If at the time of the short sale if you were current or in default on your mortgage payments.
- Where the new house is located in relation to the house with the short sale.
If you were behind on your payments at the time of the short sale the Utah FHA Guideline is that you must wait 3 years until you can buy a house with an FHA loan.
If you were Current on your mortgage at the time of the short sale you may qualify for FHA Financing if:
- You did not complete the short sale to take advantage of the declining real estate prices in the area
- You purchase at a discounted price a similiar or superior property within reasonable commuting distance
- You were current on all other debts at the time of the short sale
- The proceeds of the short sale served as payment in full
Basically in Utah you can not do a short sale and then buy a new house with an FHA loan simply to take advantage of the low house prices and purchase a nicer, bigger house, just because houses are more affordable now.
If you did a short sale in another state like Nevada or California and then moved to Utah for work. This would qualify as long as you were current on your mortgage at the time of the short sale, and the reason for the move was employment related.
This is a complicated loan and requires a Utah FHA Manual Underwrite. There are not alot of lenders who will even consider a FHA Manual underwrite right now. If you fall into this situation please give me a call as I can help you package your loan file in a way that will get approval for a fha manual underwrite. I am experienced and have had success with this time of loan file. Please give me a call or fill out the form to the right.