Buying a House After a Bankruptcy


Filed under: Qualifying for a Mortgage Loan

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Bankruptcies have been all too frequent in the past 5-6 years, but just because you may have had one doesn’t mean that you have to wait 7 years or more to finance a new home.  Lenders often look at these situations case-by-case, but here are some general guidelines:

Chapter 7 BK

Conventional Loan: 

  • 4 years after the bankruptcy was completed
  • Could be as little as 2 year with extenuating circumstances

FHA Loan:

  • 2 years from completion date
  • As little as 12 months with extenuating circumstances

VA Loan:

  • 2 years from the completion date
  • As little as 12 months with extenuating circumstances

USDA Loan:

  • 3 years from the completion date
  • Could be less than 3 years with extenuating circumstances

**Extenuating circumstances usually are considered to be temporary events that are beyond the borrower’s control such as extreme medical expenses, loss of a job, or death of a primary wage earner.

Chapter 13 BK

Rules on a Chapter 13 bankruptcy are slightly different.

Conventional Loan:

  • 2 years from the completion date
  • 4 years from the date of dismissal by a judge

FHA Loan:

  • 1 year payout has elapsed and payment performance is satisfactory

VA Loan:

  • 1 year payout has elapsed and payment performance is satisfactory

USDA Loan:

  • 1 year from date of repayment was completed and bankruptcy is completed

 

Questions?  Give me a call and let’s discuss the situation!

 


Franklin Loan Center | NMLS 237653
Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, 4131316
http://www.nmlsconsumeraccess.org/entitydetails.aspx/COMPANY/237653
For questions or concerns please email info@franklinlc.com