VA Loan Approval After Short Sale

VA Mortgage Approval After a Short Sale

Get Approved for a new VA Mortgage after a short sale.

Getting a VA loan after a short sale IS possible prior to 2 years after completing a short sale.  As an Arizona VA mortgage lender, nothing makes me happier than helping someone obtain mortgage approval and buy a home after they have been turned down multiple times by other home loan lenders and they think there is no hope left.  Well, this week was my kind of week!   We had the opportunity to do just that – approve a client who had run into mortgage hurdle after mortgage hurdle in their quest to obtain loan approval.  Recently, a military veteran and his wife contacted me regarding their ability to purchase a home using their VA mortgage benefits prior to the 2 year post short sale mark.  They had been previously turned down before and were giving it one more hail mary effort.

VA Home Loan Approval After a Short Sale Success Story

I distinctly remember the initial email.  A somewhat defeated client sent me a very detailed message outlining their income, rental properties owned, debts, employment information and most importantly the reasons behind their previous short sale.  They started telling me their story.  The first order of business for me related to their new approval was to dig DEEP into the reason behind their short sale.   I needed more of their story.  Why?  So I could visit with our in-house VA underwriting team to find out if this was something they would approve.  What exactly caused the short sale?  What specific circumstances led to this particular client having to short sale their home?

When it comes to VA mortgage guidelines, there is no specific rule outlining how long a veteran must wait to purchase a new home using a VA loan after completing a short sale.  Instead, VA requires that the veteran explain why they completed a short sale.  If there is an extraordinary circumstance behind the short sale the veteran may be eligible for a new VA loan after their short sale before the 2 year waiting time frame most people associate with a VA loan.

This particular client had lost their job and had struggled to regain employment.  After doing everything in their power to stay current on their mortgage while their income dropped and home values sank, they ultimately resorted to selling their home for less than what they owed – a short sale.  I worked with my in-house VA underwriting team to find out if this was something they would stamp “approved.”  Keep in mind, a mortgage underwriter will never guarantee loan approval prior to reviewing a complete file however at PrimeLending, they will consult with us to find out if a scenario has any possibility of being approved.  If so, we can then submit a complete file to underwriting for final review.  After consulting with our VA underwriting team I found that this particular file was something underwriting was very willing to approve.

I shared this great news with my new client.  They, as I suspected were a bit skeptical.  After all, they had been down this road before with other lenders without a happy ending.  In fact, they sent me an email stating that they were just going to hold off even after I shared that their scenario was something we could work with.  With no pressure, and instead a measure of reality I replied letting them know this is a file that I felt would be approved and that we should safely take the next step.  Thankfully, they decided to move forward and pursue buying their new dream home using a VA mortgage.  This time, the path to approval had the happiest of all endings.  We were able to approve these clients for a VA loan and they were able to purchase their new home in the Phoenix area!

Obtaining VA Home Loan Approval Post Short Sale

The most important tip I can share related to obtaining VA loan approval prior to the 2 year post short sale mark is to work with a VA mortgage lender that clearly understands how VA mortgage guidelines work AND who can help the veteran clearly/thoroughly document their short sale story.  It is critical that a veteran who is looking to purchase a new home with a VA mortgage shortly after a short sale partner with a loan officer that can advise them on how to thoroughly and accurately document/communicate what caused their short sale – “The Story.”  If a file is not properly documented, the VA underwriter reviewing the veteran’s loan application may not have enough information – not enough of  “The Story” to approve the file.

If you have any questions about qualifying for a VA loan after a short sale please call or email our team today!

By Jeremy House



  1. […] VA regulations do consider job loss as an extenuating circumstance in certain situations.  Check out this story of a Veteran client that we just closed a VA loan for prior to 2 years after a short sale with an extenuating circumstance that was 100% job loss related – click HERE. […]

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