By Richard Varner
In East Orlando, as in most of the country, the largest number of bankruptcies and short sales occurred in 2010. With affordable home prices and historically low interest rates, the conditions to buy have never been better. But with damaged credit and little hope of obtaining a mortgage, those distressed homeowners have been sitting on the side lines. They may not have wait any longer.
Fannie Mae and Freddie Mac purchased conventional mortgages from lenders to provide liquidity to the market. They set the underwriting guidelines that determine the rules we must follow to qualify for a mortgage. According to those rules, a homeowner with bankruptcy or short sale would have to wait up to 7 years before becoming eligible. However, the Federal Housing Administration has less stringent requirements.
The FHA insures loans and gives lenders the flexibility to relax some guidelines. Lower down payments are the most familiar benefit of using an FHA mortgage, but equally important is the reduced time it takes to become eligible for a mortgage after a short sale or foreclosure. With good credit and a history of on time bill payment, a home owner with a short sale may be eligible only 2 years after a short sale and 3 years after a bankruptcy. Now that we are 3 years removed from 2010, when so many homeowners were hit with hard times, many of them are finally ready to be homeowners again.
Richard Varner, P.A. is a licensed REALTOR who grew up in Orlando, graduated from UCF, and currently resides in Avalon Park with his wife Jill and daughter Kinsley. He leads The Varner Group, a Thomas Lynne Properties company and enjoys helping buyer and sellers achieve their real estate goals by providing excellent customer service and expert advice. You can learn more about Richard and his company at www.TheVarnerGroup.com
