Are you wanting to buy a home but can’t due to a prior foreclosure or Chapter 7 Bankruptcy hanging onto your credit?  Good news!  You no longer have to wait 7 years to go conventional. 

Following in the path of the FHA, Freddie Mac and Fannie Mae are both announcing major changes that include cutting the mandatory wait time for borrowers with a Chapter 7, short sale, or pre-foreclosure.  Now, just after two years you can re-apply for a loan.  You no longer have to wait 4 years.  On the other hand, FHA’s minimum waiting period is one year.  In fact, you might even be eligible to apply for a loan in a year through FHA’s Back to Work program. 

If you’re worried about your credit score, FHA doesn’t penalize you for having a credit score below 740, but FHA mortgage insurance premiums can be costly.  Typically, a foreclosure or bankruptcy can impact your credit score by 100 points or more.

Meanwhile, Fannie Mae Mortgage Rates Remain near 2015 Lows

Not only are mortgage guidelines softening, today’s mortgage loans are easier to qualify for.  Why?  Low mortgage rates lower a homeowner’s monthly payment and that cuts down on debt-to-income ratios.

According to, “the conventional 30-year fixed rate mortgage rate has averaged less than 4 percent every month since last November and many mortgage applicants report receiving rate quotes in mid-3 percents.  When mortgage rates are low, purchasing power is extended and refinance opportunities increase.”
Thirty-year mortgage rates are lower by 87.5 basis points compared to last January.  As a result, buyer’s can afford another $11,000 for every $100,000 borrowed.  It may not seem like a lot, but it can mean the difference between buying a home with an extra bedroom, or say, an upgraded kitchen.  You might even be able to buy a home in a nicer neighborhood. 

For more information on loan programs call Zeno Zennaro with CNN Mortgage at (480) 338-7343