I have buyers who found a home that they like. They have savings of 3.5% down on a 270,000 property. Problem, in 2007 the wife had cancer and her insurance didn't cover cancer treatment. Over $100,000 in debt, they filed chapter 7, included a foreclosure. Heatlh is fine now, and they want to buy a home, but lenders are telling us that she has to wait 3 years from foreclosure.
Is there anything available for them to buy now?

Most of the secondary market will not do this loan.

However, technically this is an extenuating circumstance and an exception could be made to do the loan.

In today's market I cannot think of anyone who would. Maybe a private lender who offers portfolio loans. It would no doubt require more than 3.5% down.

Do you know what kind of loan was lost in the foreclosure?

It could be longer than 3 years if it was an FHA or VA. FHA is three years from the date the lender filed the insurance claim.....and if the foreclosure paperwork was behind, like most were two years ago, it could be even longer to get a clear CAViRS. If it was FHA (or VA) ask the lender to run their socials thru the credit alert system. If there has been a government claim, there will be an 800 number to call, and whoever answers will provide the date.

I found one on a VA Loan. Wells Fargo. They follow VA guidelines which allows this scenario. However, you have to document extenuating circumstances very clearly. There cannot be a bunch of late pays before the major event that caused the bk/foreclosure and there has to be excellent credit afterward.

They almost need to be squeaky clean before the event.