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After the housing market crisis of the previous decade, many mortgage borrowers found themselves having trouble making their monthly payments. In some cases, borrowers just walked away from the mortgage completely and allowed the home to be foreclosed upo

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FHA.com is a privately owned website, is not a government agency, and does not make loans.

Applying for an FHA Loan After Previous Delinquencies

April 14, 2014

After the housing market crisis of the previous decade, many mortgage borrowers found themselves having trouble making their monthly payments. In some cases, borrowers just walked away from the mortgage completely and allowed the home to be foreclosed upon.

Some homeowners tried to get loan modifications or decided that a short sale was the way to go; the bottom line is that many Americans found themselves trying to pick up the pieces after financial hardships and eventually got back to a place where they would like to become homeowners once more.

For some of these people, the main issue is whether it’s possible to get a new FHA home loan with a past default or delinquency on the financial record. What does the FHA loan rulebook says about this question?

According to the FHA loan rules published in HUD 4155.1 Chapter Four, Section A, “If the borrower has had past delinquencies or has defaulted on an FHA- insured loan, there is a three-year waiting period before he/she can regain eligibility for another FHA-insured mortgage.”

That’s found under the HUD 4155.1 heading in Chapter four, “Waiting Period for Borrowers With Past Delinquencies, Defaults or Claims on FHA Loans” which also adds, “The three-year waiting period begins when FHA pays the initial claim to the lender. This includes deed-in-lieu of foreclosure, as well as judicial and other forms of foreclosures.”

This rule may cause some confusion--especially if the borrower does not know the exact start date of the three-year waiting period. In such cases it may be necessary to consult with the lender--the dates could be very important depending on when the application is submitted.

When it comes to borrowers who have a previous short sale on their record, lender standards may vary--it’s possible to get a new FHA home loan without a mandatory waiting period provided the existing mortgage was not in default or delinquency at the time of the short sale.

Those who had short sales and were behind on their mortgage payments will have to wait at least 12 months from the time of the delinquency before applying for a new FHA loan–lender standards would apply in these cases.

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