A foreclosure has more negative consequences than a short sale for a homeowner's future ability to obtain loans and employment. A foreclosure will negatively impact a homeowner's credit score and report for several years, make them ineligible for future Fannie Mae loans, and require disclosure of the foreclosure on loan applications. In contrast, a short sale only shows late payments on the credit report and Fannie Mae loan ineligibility is only for 2 years. A foreclosure also poses a greater risk of a deficiency judgment, while a short sale may allow convincing the lender to waive this judgment.