Short sale due to relocation

I am contemplating asking my husband to short sale our home (due to relocation) vs. using almost all of our 401k to make up for our home loss. Credit scores are in the 700s currently and must remain good in order to keep his security clearance which is necessary to maintain for his military contracting job. All of our payments have been on time and I have been told that we can purchase right away with no waiting period because we have never been late in 8 years. We have a FHA now and would probably like to do a conventional with 5% down for our new house we are building. My question is...does anyone know how much a short sale will affect credit with no late payments? And do any lenders know it to be true that we can purchase right away because we haven't missed payments? Does it have to be FHA or can it be conventional?

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Permalink Reply by Jeff Payne on April 4, 2014 at 3:14am

FHA is going to require you to be late on your payment.  Your husband may or may not lose security clearance, he needs to talk to his employer ASAP

Permalink Reply by Cat fried on April 4, 2014 at 3:21am
FHA actually does not when it is more than 50 miles for relocation and you are underwater.
Permalink Reply by Jeff Payne on April 9, 2014 at 5:37am

Did you answer your own question? :)  Do you have the FHA guideline that says they do not have to miss a payment?

Permalink Reply by Paola Martinsen on April 9, 2014 at 5:41am

You have to be at least 30 days late on the closing date. Some servicers will require you to be 30 days late prior to issuing an approval (their personal preference) but HUD requires EVERYONE to be at least 30 days late when they close. You can be current through the entire process and miss one payment only. That wouldn't be as bad :)

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