VA Loans and Short Sales: A Reader Question
A reader asks, “I served in the National Guard for 6 years. I had a short sale in December 2010. Would I qualify for a VA loan?”
There’s no short answer to a question like this for a variety of reasons, but assuming the reader is eligible for a VA loan, let’s look at the most simple part of this query. Can a VA borrower with a short sale in his or her history be able to qualify for a VA home loan?
Different lenders have different requirements. In general, if the reader were to apply with a short sale on record, the following considerations would be taken into account:
- Borrowers who were current on their mortgage payments leading up to the date of the short sale (and for the preceding 12 months) would not have the short sale held against them.
- Borrowers who were delinquent on mortgage payments leading up to the short sale would need to wait a full year from the date of the last delinquency before applying for a VA mortgage loan.
- In all cases, a borrower’s credit rating and other credit qualifying data would need to be reviewed as with any VA loan application.
Please note that the above is not a blanket description of the ability to apply for a VA loan in such circumstances for ALL lenders. Your experience may vary depending on the lender.
The important thing to take away from all this is that any VA loan applicant with a short sale on his or her record should pay strict attention to their credit and payment history following the short sale. Any negative credit information following the short sale could hurt your chances of qualifying for a new VA loan, and you’ll need to double check the date of any delinquent payments and wait one year before applying again from that date.
The lender will take a good look at your payment record following the short sale–anticipate that and you can get ahead in the meantime by establishing a record of reliable payments and other positive credit behavior.
Do you have questions about VA home loans? Ask us in the comments section.