Beginning in July, Fannie Mae will allow financially troubled home owners to complete a deed in lieu of foreclosure or a short sale and be eligible to apply for a new Fannie-backed mortgage in two years.

Currently, borrowers who have completed a deed-in-lieu must wait four years to apply for a loan that Fannie will purchase. Home buyers who go through foreclosure must wait five years.

All these waiting periods can be reduced further, if the potential buyer can show extenuating circumstances. We are beginning to think about post-recession, how you address borrowers who became unemployed through no fault of their own ... and now deserve the right to re-enter the housing-finance system, said Federal Housing Association Commissioner David Stevens.