Understanding the Seasoning Policy for Bankruptcies, Foreclosures, and Short Sales

At North Star Mortgage Network, we specialize in helping clients navigate the complex seasoning policy for bankruptcies, foreclosures, and short sales. If you’ve had a credit event in the past and are wondering how soon you can qualify for a new mortgage in 2025, this guide is for you.

We believe that your past should inform your loan approval, not define it. Our wide range of programs—including Conventional, FHA, VA, USDA, and Non-QM—means we can often help borrowers move forward sooner than they expected.

Seasoning Policy for Bankruptcies, Foreclosures, and Short Sales: Loan Program Guidelines

Understanding how different programs treat your credit history is essential to choosing the right path back to homeownership.

Conventional Loans (Fannie Mae & Freddie Mac)

  • Chapter 7 Bankruptcy: 4 years (Fannie); AUS-based (Freddie)
  • Foreclosure: 7 years (Fannie); AUS decision (Freddie)
  • Short Sale: 4 years (Fannie); AUS decision (Freddie)

FHA Loans

  • Chapter 7: 2 years from discharge (AUS approval required)
  • Chapter 13: 1 year into repayment with court approval
  • Foreclosure: 3 years from completion
  • Short Sale: No seasoning if on-time 12-month payment history exists; 3 years if defaulted

VA Loans

  • Chapter 7: 2 years from discharge
  • Chapter 13: 1 year into plan with permission
  • Foreclosure or Short Sale: 2 years from completion

Bonus tip: Make sure your Certificate of Eligibility (COE) shows remaining entitlement after a VA-related short sale.

USDA Loans

  • Chapter 7 or 13: Follows GUS findings
  • Foreclosure/Short Sale: 3-year seasoning unless 12-month clean payment record exists

Our Non-QM Options: Flexible Seasoning Policy Solutions

When conventional routes don’t fit, North Star Mortgage’s non-QM products can open the door. Our flexible seasoning policies offer shorter timelines for those with recent bankruptcies, foreclosures, or short sales:

ProgramBankruptcyForeclosureShort Sale
Smart Edge2–4 years from discharge2–4 years from event2–4 years from event
Smart Self2–4 years from discharge2–4 years from event2–4 years from event
Smart Vest / Platinum2–4 years from discharge2–4 years from event2–4 years from event
Asset Qualifier5+ years from discharge5+ years from event5+ years from event

With dozens of options available, we help our clients get clarity on which program works best for their specific situation.

The North Star Advantage: Your Comeback Partner

We’re not here to fit you into a box—we’re here to get you home. While many lenders stick to strict rules and impersonal systems, North Star Mortgage takes the time to understand your story and present your file in the best light possible.

Let’s Plan Your Comeback in 2025

No matter what your credit past looks like, you don’t have to wait forever. With the right guidance, the right documentation, and the right lender—you can move forward. Let’s build that plan together.

Your best interest is my principal concern.

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