Most people become renters after experiencing a foreclosure (purchasing another house right away is usually not feasible). However, since a foreclosure appears on your credit report and most landlords check credit reports, finding a rental is not always a piece of cake either. The best thing to do is be honest and up-front with potential landlords. Explain why you were unable to keep up with your mortgage payments, and why paying your rent won’t be a problem (e.g., your mortgage payment increased and the rent is much lower, you were out of work for six months but have a job now). If you have a positive payment history for other bills, such as a car loan or utilities, mention it. Offering a higher security deposit, if you have the cash, or a co-signer with a positive credit history can also help. (They don’t have to live with you; just signing the lease puts them on the hook for rent payments if you don’t pay. Of course, you’ll need to find someone who is willing to be a co-signer.) Individual landlords are often more flexible and willing to overlook a foreclosure than a management company running a large apartment complex.

What if you have to move out before you can find a new place to live? You may have friends or family you can stay with temporarily. You may use temporary rental services like Airbnb, that generally don’t look at your credit report, to buy more time while searching for a more stable housing situation. However, if these are not viable options for you, investigate what emergency/transitional housing is available in your community. You can contact your local information line (in many locations, you can get a directory of social services by dialing 211 or 311) or HUD (US Department of Housing and Urban Development) at 800-955-2232 or www.hud.gov/homelessness_resources.

You may not be able to buy a new house tomorrow, but if you want to be a homeowner again in the future, it is possible. Typically, you will need to wait several years after a foreclosure to qualify for a new mortgage. In the meantime, it is a good idea to work on improving your credit score and paying down your debt (discussed more later). Regardless of whether or not you had a foreclosure in your past, it is generally easier to get a mortgage if you have a good credit score and a low debt load.