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Qualifying after foreclosure: What is the USDA foreclosure wait period?

March 11th, 2020 by Sean Stephens

What is the USDA foreclosure wait period?A waiting period determines how quickly you can qualify for a mortgage after foreclosure. However, that period depends on the mortgage type you are applying for. Today, we focus on the USDA foreclosure wait period.

To see all waiting periods for each loan type, feel free you can download our complimentary loan comparison chart here.

USDA Foreclosure Wait Period

In working with so many of our customers over the years, I have found that foreclosures often occur due to circumstances outside of the homeowner’s 

control, rather than financial mismanagement.

With that being said, once a foreclosure has been finalized, a waiting period is required before a USDA mortgage can be provided.

A waiting period determines how quickly you can qualify for a mortgage after an event such as a foreclosure, bankruptcy, or short sale and can vary depending on the mortgage type you are attempting to qualify for.

Presently, the published foreclosure guidelines for USDA Loans require a 3 year wait period. However, exceptions are possible!

Are USDA foreclosure exceptions possible?

As noted above, USDA loan exceptions are possible after foreclosure. However, this is determined on a case by case basis. Thankfully, our USDA expertise and experience has successfully approved USDA foreclosure exceptions over the years.

What needs to be checked?

When you’ve had a previous foreclosure on a government loan such as VA, USDA, or FHA, it’s vital for your lender to check the CAIVRS database.

The CAIVRS database documents liens, defaults and other outstanding debt owed to federal agencies. This is crucial because an outstanding claim could stop your loan application from proceeding.

If there is a claim reporting a previous foreclosure, be prepared to wait for clearance prior to qualifying for a USDA loan.

USDA Foreclosure Guidelines

What is the USDA foreclosure wait period?

Remember, the required USDA foreclosure wait period is 3 years. If you are applying for a different type of loan, the required wait period may be different. You can view all waiting periods by downloading our FREE Loan Comparison Chart.

If you have recently been denied for a mortgage because of a previous foreclosure, please take advantage of our expertise by using our free Second Opinion Service (SOS).

It’s great for both new pre-qualifications and existing transactions!

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