Does Divorce Qualify for Hardship After Shortsale

[Nate Thomas]

I am trying to arrange financing for my first REI, I will owner occupy the unit, it will be a multifamily house. I went through a short sale little over 2 years ago because of a divorce. I subsequently moved across the country so I could have joint custody of my children. I am trying to qualify for a FHA Loan 3.5% down. I know there rules state 3 years after a short sale to qualify. They state 2 years if you have had a "hardship."

My question is, does a divorce qualify as a hardship for FHA? Allowing my to finance after 2 years after a short sale.

[Wayne Brooks]

Yes, a divorce will generally qualify you for a short sale (which apparently it did). FHA just wants to make sure you didn't simply do a "strategic" short sale, before they would look at you for a new loan. The 2-3 year limit is not automatic however, it's a minimum. It still depends on your current credit score/history. One of the factors will be how far behind you were at the time of the short sale. Attempting to get preapproved is the best way to find out (with tax returns, bank statements, etc., NOT with just W-2's and and an interview).