You can buy again after foreclosure. Here are two real-life stories of families who lost their homes, but didn’t let that stop them from becoming homeowners again.

It’s a rough time when someone goes through foreclosure. The toll on finances and emotions can topple even the strongest of people.

But there is hope for those who lost their home to foreclosure. In fact, recent research shows that there is light at the end of the tunnel, and people who suffered foreclosure are buying homes again. They are called boomerang buyers.

Buying again after foreclosure

Sean Fergus, manager of research at the John Burns Real Estate Consulting in Irvine, California, completed the analysis on boomerang buyers earlier this year. He found that of the 5.3 million households who lost their home to a foreclosure or short sale from 2007 to 2013, about 889,000 have already repurchased a home, and about 2.8 million will become homeowners again by 2021. However, 1.8 million will be stuck renting for at least the next seven years.

He expects that the recently reduced FHA loan limits will impair the higher price points in a handful of markets and will stop many of those who had gone through foreclosure to not be able to get a loan for a home for a while. For instance, the 2013 FHA loan limit for San Diego has been dropped to $546,250, and Orange County, California, and Washington, D.C., dropped from $729,750 to $625,000.

FHA loans are the most forgiving for those with foreclosures in their credit history. To qualify, you must wait at least three years after the foreclosure. Sometimes that waiting period is shortened to just one year, depending on whether your foreclosure was caused by an event out of your control such as divorce, job loss or serious illness or death in the family. A conventional loan through Fannie Mae or Freddie Mac is only accessible after a foreclosure after seven years.

But even Freddie Mac’s website gives hope to those after a foreclosure by issuing the statement — “If you’d like to own a home again, start your preparation today. Stay positive and stay focused, and don’t give up.” It’s all about getting that credit score back up, and saving a significant down payment to demonstrate your investment and responsibility in buying another house.

Liz Recchia, broker and owner of We Sell Real Estate in Phoenix, has helped many distressed homeowners the past 18 years to buy homes again after a foreclosure, short sale or bankruptcy.

Not only does she try to help them find the right home and the right loan, but she also helps them during the years before they can buy a new home with simple budget forms and other advice on her website.

“Tools your great-grandparents used work today, and property ownership is at the core of what we do,” she says.

Here are two cases in which Recchia’s clients were able to come out of foreclosure and buy homes again:

The Gomez family bought again after foreclosure

They were forced into bankruptcy in 2009, and their house was foreclosed on. By early 2012, they had paid off the last of their debt, saved $20,000 and prepaid their utility expenses several months in advance.

“When I met them, they were thinking of buying a house again because their family of five was bursting at the seams in their small apartment. They told me they never wanted to experience the loss of a house again,” she says.

They also wanted to pay off the new house in 15 years and did not want to spend more than $140,000, even though they were preapproved for a $208,000 loan.

Recchia found a new home builder in the area, and they were able to purchase a new 1,800-square-foot home. They stuck to their budget by accepting the builder’s basic flooring and appliances and developed a plan to save money and pay for flooring and appliance upgrades in cash. This year, Mrs. Gomez became very ill and was unable to work for months. But they had set up their payments so if one of them loses their job, their spouse’s income could pay for the house and all family expenses.

“When I saw them just a few months ago, Mrs. Gomez had gone back to work, they had paid all of her medical expenses in cash and never missed a house payment. They are still on track to pay off their house early,” she says.

Bankruptcy and foreclosure in 2010, then an all-cash lifestyle

“I had met a couple at one of my open houses in January 2011. They had worked hard to pay off debt, accumulate savings and re-order their lives,” Recchia says. “They both worked two jobs and took any overtime available. They had decided to live an all-cash life with the exception of a small home loan.”

With a little more time, they were able to save enough money to purchase a house in west Maricopa County. They did not want a traditional bank lender. Because they now lived a life based on cash, their credit scores were not good enough to qualify for a federally backed loan. Most of all, they wanted a 7-10 year loan. The goal was to own their house sooner rather than later.

In 2012, they submitted an alternative credit report to a private money lender along with paystubs and savings’ account statements. The private lender manually underwrote the couple and offered them a 7-year loan at 8 percent with a 30 percent down payment.

“They were overjoyed. Within two months, they were closing on their new house. I received an update from them earlier this year. They are on track to pay off the house in 2017 – two years earlier than originally planned,” she says. “So, in 2017, they will be debt free and own their house, not bad considering where they were in 2010.”

Can you buy a home after foreclosure?

Many people assume they will never qualify to buy a home again. Yet those who fell on hard times but have kept a clean credit record since often have higher credit scores than they thought.