It is very common the last few years that many sellers of properties had to complete a “short sale” to sell their home because the sales price was lower than mortgage loan balance they had on the property. This is called a “short sale”. The good news is that you can apply for a VA loan in California only two years after a short sale. When a borrower completes a short sale, the mortgage that was involved is most often reported on their credit as a derogatory item stating “settled for less than full balance”. The way this former mortgage is reported to the credit bureaus alerts the VA underwriter to the fact the borrower applying for the VA loan had a previous short sale.
But as stated above, the good news is that veterans and active military can qualify for a VA loan only two years after a short sale.
In some rare cases a VA borrower can apply for a VA loan immediately after short sale. To get a VA loan immediately after a short sale the VA borrower must have not missed any mortgage payments leading up to the short sale, AND they must have a very good extenuating circumstance for the short sale. The extenuating circumstance cannot be the standard loss of job or common financial reasons for not being able to afford the payment. The home owner would have had to been forced to sell because of a job transfer out of the area, documentable medical condition, documentable crime issue, etc.. But to be clear, if the VA borrower waits out the two year period, it is OK if they missed payments leading up to the short sale and do not have a rare extenuating circumstance.
So I hope this helps you understand the VA home loan requirements for being approved for a VA loan in a California after a short sale. Please email me at firstname.lastname@example.org or call at 858-922-7899 if you have any further questions about your VA eligibility.
Some other interesting highlights about VA loans in California:
- You can get a VA loan two years after a foreclosure in California
- VA loan requirements only require two years after a Chapter 7 Bankruptcy to apply for a VA loan in California
- VA loan limits in California for 100% financing go up to $1 million in San Francisco, Oakland, and most of the San Jose surrounding area. VA loan limits in Los Angeles and Orange County go up to $700,000 with zero down. The San Diego VA loan limit is $537,750 with zero down. You can go above these California VA loan limits with a small down payment.
Sr. Loan Officer (and VA specialist)