Home Loan After Chapter 7 Bankruptcy

Can I Get Home Loan After Chapter 7 Bankruptcy?

Home Loan After Chapter 7 Bankruptcy

The economic scene has been brutal for many people over the last few years, especially after the financial meltdown of 2008. Many folks dealt with job losses and big financial shifts, which led to a rise in personal bankruptcies.

You can still get a home loan after declaring Chapter 7 bankruptcy. There is usually a waiting period of two to four years, depending on the lender and loan type. However, options are available for those who want to improve their finances. Raising your credit score can help you qualify for a mortgage if you’re looking to buy a house.

There Is Life After Bankruptcy: Qualifying For Home Loan After Chapter 7 Bankruptcy

Many folks who had perfect credit and never missed a payment in their lives were forced to bankruptcy because they lost their jobs.  Losing a job is one thing but never in history of America has a recovery taken so long.  To this date, 8 years after the Great Recession of 2008 the economy has not fully recovered.

The great news is a bankruptcy is a federal law that protects consumers against creditors in the event of financial hardship and gives consumer the opportunity to start over and be debt free.

The other great news is that there is life after bankruptcy and those who had to file bankruptcy in the past can qualify for a mortgage after bankruptcy and can again be homeowners.

Types Of Bankruptcies And Home Loan After Chapter 7 Bankruptcy

There are two types of bankruptcies:

Chapter 7 Bankruptcy

Chapter 7 Bankruptcy is a well-known option. It is a good c oice for people with a lot of unsecured debt and a low income. It’s important to note hat there is an income limit—if your earnings exceed this, you won’t be eligible. You will have to look i to filing for Chapter 13 Bankruptcy instead. If you want to buy a ho e, you can qualify for an FHA Loan just two years after your Chapter 7 Bankruptcy is discharged. For a Conventional Loan though, you’ll need to wait four years.

Chapter 13 Bankruptcy

On the other hand, there’s Chapter 13 Bankruptcy, which is all about restructuring your debt. You need to have a stea y job or reliable income to go this route. This option works for p ople with some income and enough equity in their home and other assets. Upon filing for Chapter 13, a Bankruptcy Trustee is appointed to assist you in organizing everything. They’ll look at your i ome and take a percentage to distribute to your creditors. This repayment plan usu lly lasts three to five years, and once it’s done, all your remaining debts are wiped clean.

If you are in a Chapter 13 Bankruptcy Repayment Plan, you can get an FHA Loan after one year, but you need approval from the Trustee. Once your Chapter 13 is discharged, there’s no waiting period to get an FHA Loan, but if your discharge hasn’t been seasoned for at least two years, it’ll require a manual underwriting process, which means you’ll need to provide verification of rent, too.

Qualifying For Home Loan After Chapter 7 Bankruptcy

For those who have no or very little assets, Chapter 7 Bankruptcy protects the person from further collection and eliminates all of their debts after their Chapter 7 Bankruptcy has been discharged.  For those who have filed a Chapter 7 Bankruptcy, there is a 2 year mandatory waiting period from the discharge date of their Chapter 7 Bankruptcy before they are eligible to qualify for a FHA mortgage loan.  There is a mandatory four year waiting period after the discharge date of a bankruptcy to qualify for a conventional loan.

Qualifying For Home Loan After Chapter 13 Bankruptcy

The second, a Chapter 13 Bankruptcy, is protection against creditors and are normally filed for folks who have assets and need time so they can restructure their debts.  To be eligible for Chapter 13 Bankruptcy, you need income, whether you are a W-2 employee or own your own business.  For those who have filed Chapter 13, there is a 1 year waiting period before they are eligible to qualify for a  FHA insured mortgage loan.  You would need the permission from the trustee of the Bankruptcy Courts.

If you had your Chapter 13 Bankruptcy discharged, there is no waiting period from the Chapter 13 discharge date to qualify for a FHA insured mortgage loan.  There is a two year waiting period to qualify for a FHA insured mortgage loan if you had a Chapter 13 bankruptcy dismissed.  There is a two year waiting period from the Chapter 13 Bankruptcy discharge date to qualify for a conventional loan.  There is a four year waiting period after a Chapter 13 dismissal date to qualify for a conventional loan.

Judgments And Other Debts

One major benefit of bankruptcy is that it can help eliminate many judgments against you. Judgments can hurt your credit for years and stay on your record for up to ten years. In some cases, creditors can renew these judgments, which means they could last even longer. This situation can be stressful because creditors may try to collect money from you through wage garnishments or by taking money from your bank account. By filing for bankruptcy, you can often get rid of these judgments and reduce your financial stress.

Qualifying For Conventional Home Loan After Chapter 7 Bankruptcy

If you included your mortgage as part of your bankruptcy, the waiting period to qualify for a conventional loan starts from the discharge date of your Chapter 7 Bankruptcy.  Prior to this new Fannie Mae guideline on mortgage part of bankruptcy, the waiting period for those who had mortgage part of bankruptcy started from the recorded date when the deed was transferred out of the homeowners name into the name of the mortgage lender which sometimes took years after the discharge date of the bankruptcy.

Bottom line is that if you have a mortgage part of bankruptcy, the waiting period for both the foreclosure and bankruptcy starts from the discharge date of the bankruptcy and you can qualify for a conventional loan four years from the discharge date of the your bankruptcy.

The foreclosure recorded date can be at a much later date than the discharged date of the Chapter 7 Bankruptcy and that does not matter. The waiting period is four years from the discharged date of the Chapter 7.

Borrowers who need a five-star national mortgage company licensed in 48 states with no overlays and who are experts on home loans after Chapter 7 bankruptcy, please contact us at 800-900-8569, text us for a faster response, or email gcho@gustancho.com.

Frequently Asked Questions About Home Loan After Chapter 7 Bankruptcy:

Q: Can I Really Get a Home Loan After Chapter 7 Bankruptcy?

A: Yes! You can qualify for a home loan after Chapter 7 bankruptcy. There’s a waiting period, but it’s absolutely possible.

Q: How Long Must I Wait for a Home Loan After Chapter 7 Bankruptcy?

A: You must wait 2 years after your Chapter 7 bankruptcy discharge for FHA loans. For conventional loans, it’s a 4-year wait.

Q: Does Bankruptcy Ruin My Chances of Ever Repurchasing a Home?

A: No, bankruptcy doesn’t stop you from buying a home forever. It gives you a fresh start. Many borrowers successfully get a home loan after Chapter 7 bankruptcy.

Q: What Type of Home Loan is Easiest to Get After Chapter 7 Bankruptcy?

A: An FHA loan is usually the easiest home loan after Chapter 7 bankruptcy because the waiting period is shorter and credit guidelines are more flexible.

Q: Do I have to Rebuild My Credit First Before Getting a Home Loan After Chapter 7 Bankruptcy?

A: Yes. Rebuilding your credit right after bankruptcy is important. Pay your bills on time and manage new credit carefully to qualify faster.

Q: Can I Qualify for a Conventional Home Loan After Chapter 7 Bankruptcy?

A: Yes, you can qualify for a conventional home loan 4 years after your Chapter 7 bankruptcy discharge date.

Q: If My Home were Included in the Bankruptcy, Can I Get a New Home Loan?

A: If your former mortgage was part of your bankruptcy, the countdown starts from your bankruptcy discharge date, rather than the foreclosure date. You are eligible for a conventional mortgage 4 years after your discharge.

Q: Can Filing for Bankruptcy Remove Judgments from My Credit Report?

A: Yes, filing Chapter 7 bankruptcy can remove most judgments. This helps clear your financial record, making it easier to get a home loan after Chapter 7 bankruptcy.

Q: What’s the Quickest Home Loan Option After Chapter 7 Bankruptcy?

A: FHA loans offer the quickest route to homeownership after Chapter 7 bankruptcy, requiring only a 2-year waiting period.

Q: Who Can Help Me Qualify for a Home Loan After Chapter 7 Bankruptcy?

A: Mortgage experts specializing in home loans after bankruptcy can guide you through the process and help you get approved. Contacting a mortgage professional is your best step.

This blog about “Qualifying For Home Loan After Chapter 7 Bankruptcy” was updated on May 19th, 2025.