Bankruptcy Mortgage Guidelines On Government And Conforming Loans

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This BLOG On Bankruptcy Mortgage Guidelines On Government And Conforming Loans Was UPDATED And PUBLISHED On September 21st, 2019

Bankruptcy Mortgage Guidelines
Gustan Cho Associates

All mortgage loan programs have mandatory waiting period after bankruptcy and foreclosure. Borrowers need to adhere to Bankruptcy Mortgage Guidelines to qualify for a residential mortgage loan.

  • The question is when does waiting period after bankruptcy and foreclosure start? 
  • Waiting period after bankruptcy and foreclosure differs depending on the mortgage loan program
  • For example, the waiting period after bankruptcy and foreclosure is different for FHA Loans than it is for Conventional Loans

In this article, we will cover and discuss Bankruptcy Mortgage Guidelines on government and conventional loans.

Bankruptcy Mortgage Guidelines On Government Loans

what are Bankruptcy Mortgage Guidelines On Government Loans

Government Loans are home loans insured by the federal government.

There are three different types of government loans:

  1. FHA Loans
  2. VA Home Loans
  3. USDA Loans

For FHA and VA Loans, there is a minimum of a two year waiting period after Chapter 7 Bankruptcy to qualify. With USDA, the waiting period is three years after Chapter 7 Bankruptcy discharged date.

Chapter 7 Versus Chapter 13 Bankruptcy Mortgage Guidelines

what are Chapter 7 Versus Chapter 13 Bankruptcy Mortgage Guidelines

The waiting period after Chapter 7 Bankruptcy starts from the discharged date of the Chapter 7 Bankruptcy and not the Chapter 7 filing date:

  • There is a one year waiting period after Chapter 13 Bankruptcy to qualify for VA and FHA Loans with the Chapter 13 Bankruptcy Court’s approval
  • The start date of the waiting period is from the Chapter 13 Bankruptcy file date and 12 months of timely payments needs to be made to qualify for VA and FHA Home Loans
  • For Conventional Loans, there is a two year waiting period to qualify for a Conventional Loan from the Chapter 13 Bankruptcy discharged date
  • With a Chapter 13 Bankruptcy dismissal, there is a four year waiting period to qualify for a Conventional Loan

The waiting period starts from the Chapter 13 Bankruptcy dismissal date.

Waiting Period After Housing Event To Qualify For Government Loans

what is Waiting Period After Housing Event To Qualify For Government Loans

There are mandatory waiting period after foreclosure and deed in lieu of foreclosure to qualify for FHA, VA, USDA Loans.

  • There is a three year waiting period after the recorded date of foreclosure and deed in lieu of foreclosure to qualify for FHA and USDA Loans
  • The waiting period time clock does not start from the day that the property was surrendered
  • The waiting period time clock starts from the date of the sheriff’s sale or from the date the deed to the home was transferred out of the home buyers name and into the lenders name or the new home buyers name

There is a two year waiting period to qualify for VA Loans after foreclosure, deed in lieu, short sale.

Bankruptcy Mortgage Guidelines On Mortgage Part Of Bankruptcy

what are Bankruptcy Mortgage Guidelines On Mortgage Part Of Bankruptcy

Homeowners who had a prior mortgage part of bankruptcy and want to qualify for FHA Loans, the waiting period starts from the recorded date of the foreclosure. Not the date of the Chapter 7 Bankruptcy discharged date even though mortgage was wiped off on Chapter 7 Bankruptcy discharge.

Fannie Mae And Freddie Mac Bankruptcy Guidelines On Conforming Loans

what are Fannie Mae And Freddie Mac Bankruptcy Guidelines On Conforming Loans

Homebuyers interested in qualifying conventional loans and have a prior Chapter 7 Bankruptcy, there is a four year waiting period after bankruptcy discharged date to qualify for a conventional loan.

  • Homeowners who had a prior mortgage part of bankruptcy, they can qualify for a conventional loan four years after the discharged date of bankruptcy
  • This is the case even if the foreclosure was recorded at a later date after Chapter 7 Bankruptcy discharged date
  • The mortgage cannot be reaffirmed after the bankruptcy
  • There is a two year waiting period after Chapter 13 Bankruptcy discharged date to qualify for a conventional loan

There is a four-year waiting period to qualify for a conventional loan after a Chapter 13 Bankruptcy dismissal date.

VA Bankruptcy Mortgage Guidelines

VA Bankruptcy Mortgage Guidelines with mortgage part of bankruptcy is as follows:

  • If there is a mortgage included in bankruptcy, there is a two year waiting period from the discharged date of bankruptcy discharged date
  • The date of the housing event does not matter

However, the housing event needs to have been finalized as a foreclosure, deed in lieu, short sale.

Waiting Period Requirements On USDA Mortgages

what is Waiting Period Requirements On USDA Mortgages

USDA Bankruptcy Mortgage Guidelines with mortgage included in bankruptcy is as follows:

  • If there is mortgage included in bankruptcy, there is a three year waiting period from discharged date of bankruptcy discharged date
  • The date of housing event does not matter

However, the housing event needs to have been finalized as foreclosure, deed in lieu of foreclosure, short sale.

Conforming Loans After Housing Event

How Conforming Loans After Housing Event

There is a seven-year waiting period to qualify for a conventional loan to qualify for a conventional loan after a foreclosure.

  • There is a four year waiting period after a short sale from the short sale date reflected on the HUD Settlement Statement to qualify for a Conventional Loan
  • There is a four year waiting period after deed in lieu of foreclosure to qualify for a conventional loan to qualify for a conventional loan
  • The waiting period starts from the recorded date of the deed in lieu of foreclosure and not the date that the keys were surrendered to the lender

First time home buyers and/or seasoned home buyers looking for a direct lender with no overlays on governemnt and conventional loans please contact us at Gustan Cho Associates at 261-716-8151 or text us for faster response. Or email us at gcho@loancabin.com.

2 Comments
  1. Mouser says

    Can I get a loan after 12 months of discharge from a chapter 13 bankruptcy ?

    1. Gustan Cho, NMLS 873293 says

      Of course. No problem. Can you please call and/or text me on my cell at 262-716-8151 or email me at gcho@gustancho.com. Looking forward to working with you and your family.

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