One of the primary use cases for non-QM lending is reduced waiting periods after major derogatory credit events. Agency programs (FHA, VA, Fannie, Freddie) have fixed minimum waiting periods. Non-QM lenders can go shorter -- at a cost in rate and LTV.
Agency Baseline Waiting Periods
- ✦FHA foreclosure: 3 years from recorded date.
- ✦Fannie/Freddie foreclosure: 7 years from completion (3 years with extenuating circumstances at reduced LTV).
- ✦Chapter 7 bankruptcy: FHA 2 years discharge; Conventional 4 years; VA 2 years.
- ✦Chapter 13 bankruptcy: FHA/VA 12 months into repayment with trustee approval; Conventional 2 years from discharge or 4 years from dismissal.
- ✦Short sale/deed-in-lieu: FHA 3 years; Conventional 4 years (2 with extenuating circumstances).
Non-QM Alternatives
Non-QM programs available in 2026 include 1-day-out-of-foreclosure options at high LTV (typically 70% or lower) and programs with 12 to 24 months seasoning after foreclosure or bankruptcy at 75-80% LTV. These programs exist across bank statement, asset depletion, and DSCR structures. Pricing reflects the risk: rates typically run 150 to 250bps above comparable agency loans.
What to Document
Non-QM lenders require full credit event documentation: discharge order, final foreclosure deed recording date, or short sale settlement statement. Gaps in documentation are common causes of denial even at programs that advertise reduced seasoning.
Aria on vicariointel.com can identify which non-QM programs and lenders offer the shortest seasoning for a specific credit event profile. Run the scenario before you spend time pre-qualifying.
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