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In a recent move, Fannie mae and Freddie Mac changed their guidelines in regards to foreclosure history.  Now on all conventional loans no matter the loan to value or down payment amount, the borrower must be 7 years removed from a foreclosure.  This changed from the 4yrs that were needed based on a 20% down payment and longer time periods needed for lower down payments.  This does not affect FHA loans, luckily.  As they only require 3yrs removed from a foreclosure. 

Keep in mind this can affect clients who had a short sale transaction in their past.  As many short sales are approved based on the client being behind on the mortgage.  And that the foreclosure process could have started.   Please understand that  a “foreclosure” is considered as soon as the foreclosure process is started.  Not just that the home was foreclosed on.  Someone could have the foreclosure process started and then short sale the home, they would fall under the foreclosure guidelines since the process started.  And also many lenders consider a short sale the same as a foreclosure. 

And finally, the date of when the home was foreclosed on or sold, is the date that starts the 7 year time period.