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1. Home short sold cannot be a FHA loan
2. Must have been current on mortgage at time of sale
3. Sold home must not require deficiency payment for the difference
4. 620 minimum credit score
5. 3.5% down payment
6. Short sale caused by extenuating circumstances and not just a person trying to take advantage of the market (by selling short and buying same type home at half the price)

The last requirement of extenuating circumstances is where it gets cloudy. An extenuating circumstance, according to FHA is one of the following:

1. Job loss or loss of income
2. Sickness or illness of the borrower
3. Death of a wage earner
4. Circumstances beyond your control

If you don't meet the above criteria; here are the time frames you have to wait before purchasing again:

-Fannie Mae Conventional 2 years with 20 percent down payment
-FHA- 3 years from time of sell