FotoFlexer_PhotoSome additional information released regarding borrower’s who have negotiated “short sales” on their existing homes and purchase a new home: 

FHA financing on the new home is “not” eligible if the home is located in the same “geographic area” as the property on which the short sale is/was completed as this could be a form of buy and bail.  Consideration could be given to an “empty-nester” needing to scale down but wants to remain in the same neighborhood.  Documentation to support would be required.