I am current on my mortgage, can I get a FHA loan after my short sale? The answer to your question is not a simple "yes or no." It will depend on several factors, which I discuss below. For FHA, you would be eligible immediately for a new FHA-insured mortgage if:
• you are current on your mortgage and other installment debts at the time of the short sale and the 12-month period preceding the short sale, and
• the proceeds from the short sale serve as payment in full.
A lender may make an exception to this rule for a borrower in default on his/her mortgage at the time of the short sale, if the default was due to circumstances beyond the borrower's control, such as death of primary wage earner or long-term uninsured illness, and a review of the credit report indicates satisfactory credit prior to the circumstances beyond the borrower's control that caused the default.
You would not be eligible immediately(there is a 3 year waiting period) for a new FHA mortgage if you had pursued a short sale agreement on your principal residence simply to
• take advantage of declining market conditions, and
• purchase, at a reduced price, a similar or superior property within a reasonable commuting distance or.
• if the property you sold was under FHA's pre-foreclosure sale program and FHA paid a claim associated with the short sale.
My advice is to contact a lender or several lenders after your short sale. The lender(s) will look at your complete file and then make a determination. Be prepared to provide supporting documentation along with a letter of explanation for your short sale.