FHA regulations are pretty vague, and brokers can have a variety of opinions of them (a lot like lawyers). That being said, you don't have
to have the home foreclosed. But if
you go through the foreclosure process, it's three years from the date of the trustee
's sale. That is, there is a specific date that the foreclosure happens on, for FHA purposes, and that's the date of the trustee's sale. The three years starts running at that point. And it can't be backdated. Now this can be reduced if there are "extenuating circumstances", such as a good credit rating, etc... But you'd have to wait 3 years from the actual sale date to do so. Best bet would be to either (a) sell you home, not foreclosure, or (b) walk away after you buy a new one.
Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please select the "accept" button. If you have already clicked "accept", or if you will in the future, please let me know so I can track these for my own reports and customer satisfaction stats. Thank you, XXXXX XXXXX good luck to you!