Buying a House After a Bankruptcy

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Filed under: Qualifying for a Mortgage Loan

Tagged with:buying a home after a bankruptcy · financing a home after a bankruptcy · financing after a bankruptcy

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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!

 

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