USDA Wait Timeframe
USDA Chapter 10: Credit Analysis 7 CFR 3555.151 Effective 9/1/2014 https://usdalinc.sc.egov.usda.gov/docs/rd/sfh/3555/ByIndividualChapter/Chapter10_Credit_Analysis_DRAFT.pdf
There are no extenuating circumstances that can be found for a loan earlier than 3 years with USDA.
Evaluating Credit Involving Short Sales (Pg 10-24)
- A short sale is considered a pre-foreclosure activity or event.
- An applicant is ineligible for a mortgage loan if they pursued a short sale agreement on their principal residence to take advantage of declining market conditions and purchases at a reduced price a similar or superior property within a reasonable commuting distance.
- If an applicant was current at the time of short sale, they may be eligible for a new mortgage loan. The prior mortgage payment history must reflect all mortgage payments due were made on time for the 12 month period preceding the short sale and all installment debt payments for the same period were also made within the month due.
- An applicant in default on their mortgage at the time of the short sale (or preforeclosure sale) is not eligible for a new mortgage loan for three years from the date of pre-foreclosure sale.
Indicators of unacceptable credit: (Pg 10-9)
- Foreclosure within 3 years:
o Including pre-foreclosure activity, such as a pre-foreclosure sale or short sale in the previous 3 years;
- Bankruptcy within 3 years:
o Chapter 7 bankruptcy discharged in the previous 3 years;
o Chapter 13 bankruptcy that has yet to complete repayment or has completed payment in the most recent 12 months;
- Late mortgage payments if any mortgage trade line during the most recent 12 months shows 1 or more late payments of greater than 30 days.