“How will my pending short sale [foreclosure or bankruptcy] effect my ability to borrow money to buy a home in the future?”

Not an uncommon question. Here’s the answer from Fannie Mae’s point of view. It’s not as bad as you might think.

Earlier this year, Fannie Mae updated its credit guidelines for borrowers who experience one of these circumstances. And, in general, the wait time will now range from two to five years.

Homeowners who lose their properties to foreclosure or file multiple bankruptcies within a seven-year period will have the longest wait”“five years.

In the case of foreclosure, additional requirements and restrictions will apply after five years and up to seven years as well, which include making a minimum 10% down-payment, having a credit score of at least 680, and having limited cash-out refinance options. Also, the purchase of second homes or investment properties is not permitted.