Conforming Loans After Bankruptcy and Foreclosure

Conforming Loans After Bankruptcy and Foreclosure: How to Get Approved

If you’ve gone through bankruptcy or foreclosure, you might think homeownership is out of reach. But the good news is you can still qualify for a conforming loan—you just need to know the waiting periods, requirements, and steps to get approved.

At Gustan Cho Associates, we specialize in helping homebuyers qualify for conforming loans after bankruptcy and foreclosure, even if other lenders have turned them down. There are no lender overlays or unnecessary roadblocks—just real mortgage solutions.

In this guide, we’ll cover everything you need to know, including:

• The latest Fannie Mae & Freddie Mac guidelines for 2024
• Waiting periods after bankruptcy, foreclosure, and short sales
• How to boost your credit and qualify faster
• Alternative loan options if you don’t meet the waiting period
• How to get pre-approved today

Let’s dive in.

What Are Conforming Loans?

A conforming loan is a type of mortgage designed to meet specific guidelines established by Fannie Mae and Freddie Mac, which are government-sponsored entities that play a significant role in the housing finance market. These guidelines include various criteria related to the borrower’s creditworthiness, income levels, and the type of property being financed. By adhering to these standards, conforming loans typically offer lower interest rates and better terms, making them more accessible and affordable for many homebuyers.

To ensure that these loans remain within a certain threshold, the Federal Housing Finance Agency (FHFA) determines the maximum loan limits.

For the year 2025, the baseline limit for conforming loans is set at $806,500 in most regions. This limit can vary significantly in areas deemed high-cost, where property values often exceed the typical thresholds. This structure is intended to help stabilize the housing market and provide opportunities for individuals seeking home financing within the defined limits.

You can still get conforming loans after bankruptcy and foreclosure, but you’ll need to wait a certain period before applying. This waiting time helps show that you are now in a better financial situation.

Waiting Periods for Conforming Loans After Bankruptcy and Foreclosure

Fannie Mae and Freddie Mac have particular guidelines regarding the waiting period after experiencing financial difficulties such as bankruptcy or foreclosure. This waiting time starts when your bankruptcy is finished or your foreclosure process is done.

If you want to get a conforming loan after bankruptcy or foreclosure, here’s how long you should wait before you can apply for a regular loan:

If you don’t meet the waiting period, don’t worry—there are other options, like non-QM loans or FHA/VA loans with shorter waiting periods.

How to Qualify for Conforming Loans After Bankruptcy or Foreclosure

Just because you’ve waited the required time after bankruptcy or foreclosure doesn’t guarantee getting a loan. Lenders want to make sure you’re financially stable and ready for a mortgage. To get conforming loans after bankruptcy and foreclosure, you need to show that you can manage your money well. Here’s what you need to do:

1. Rebuild Your Credit Score

Lenders look for a minimum 620 credit score for conventional loans, but the higher, the better.

• Pay all bills on time—even one late payment can hurt your score.
• Keep your credit card balances low (below 30% of your limit.
• Avoid applying for new credit before your mortgage.

2. Save for a Down Payment

When considering conforming loans after bankruptcy and foreclosure, it’s important to consider saving for a down payment. Most of the time, traditional loans need a down payment of about 5%. However, if your credit score is good, you can pay only 3% as a first-time homebuyer.

3. Show Stable Income

You’ll need two years of stable income and steady employment.

• If you’re self-employed, lenders may ask for two years of tax returns.
• Gaps in employment? Some exceptions exist—talk to a lender.

4. Keep Your Debt-to-Income (DTI) Ratio in Check

When you want a loan after bankruptcy or foreclosure, it’s important to watch your Debt-to-Income (DTI) Ratio. This number shows how much money you owe compared to how much you make. Lenders like to see a DTI ratio under 45%. If your DTI is too high, you can try to pay off some of your debts or find ways to earn more money. Keeping your DTI low can help you qualify for conforming loans after bankruptcy and foreclosure.

Alternative Loan Options If You Don’t Qualify for a Conforming Loan

If you haven’t met the waiting period for a conventional loan, here are other options:

1. FHA Loans: 2-year wait after Chapter 7, 1-year wait after Chapter 13, 3-year wait after foreclosure/short sale
2. VA Loans: 2-year wait after Chapter 7 or foreclosure, 1-year wait after Chapter 13
3. Non-QM Loans: No waiting period required! Perfect for borrowers with recent bankruptcy/foreclosure.

At Gustan Cho Associates, we help people with trouble getting conforming loans after bankruptcy and foreclosure. Our non-QM loans don’t need tax returns and don’t have strict credit score rules. If you can’t get a traditional loan right now, we can help you buy a home quicker with our flexible guidelines.

How to Get Pre-Approved for a Conforming Loan Today

Ready to start your journey to homeownership? Here’s how you can get pre-approved:

Step 1: Check Your Eligibility

Reach out to us at 800-900-8569 or text us for a faster response.

Step 2: Get a Quick Credit Review

We’ll check your credit, income, and debt to see which loan fits best.

Step 3: Start Your Pre-Approval

We’ll guide you through the process so you can shop for a home with confidence. At Gustan Cho Associates, we specialize in helping borrowers get approved when other lenders say no. We have solutions for you if you’re struggling to find a mortgage after bankruptcy or foreclosure. Email us at gcho@gustancho.com or visit our website to get started today.

Final Thoughts: Yes, You Can Get a Conforming Loan After Bankruptcy or Foreclosure

Going through bankruptcy or losing a home can be tricky, but it doesn’t mean you can’t own a home again. Many can get conforming loans after bankruptcy and foreclosure if they have a good plan!

• Know your waiting period
• Rebuild your credit and finances
• Explore alternative options if needed
• Work with an expert mortgage lender

At Gustan Cho Associates, we make the process easy, fast, and hassle-free. There are no lender overlays or unnecessary denials—just real mortgage approvals. Call us today at 800-900-8569 to start your homebuying journey. We are available 7 days a week, even on holidays.

Frequently Asked Questions About Conforming Loans After Bankruptcy and Foreclosure:

Q: Can I Get Conforming Loans After Bankruptcy or Foreclosure?

A: Yes! You can qualify for conforming loans after bankruptcy or foreclosure, but you’ll need to wait a certain amount before applying. The duration of the waiting period is determined by whether you experienced a Chapter 7 bankruptcy or Chapter 13 bankruptcy, a foreclosure, or a short sale.

Q: How Long do I Wait to Get Conforming Loans After Bankruptcy?

It depends on the type of bankruptcy:

• Chapter 7 Bankruptcy: 4-year waiting period after the discharge date.
• Chapter 13 Bankruptcy (Discharged): 2-year waiting period after the discharge date.
• Chapter 13 Bankruptcy (Dismissed): 4-year waiting period after the dismissal date.

Q: How Long do I Wait to Get a Conforming Loan After Foreclosure?

A: If you’ve had a foreclosure, the waiting period for a conforming loan is 7 years from the foreclosure completion date. However, if your mortgage was part of a Chapter 7 bankruptcy, the waiting time is just 4 years from the date your bankruptcy was discharged, regardless of when the foreclosure took place.

Q: What if I had a Short Sale or Deed in Lieu of Foreclosure?

A: The time frame for a short sale or deed in lieu of foreclosure is four years before you become eligible for a conforming loan.

Q: What Credit Score do I Need for a Conforming Loan After Bankruptcy or Foreclosure?

A: Most lenders require at least a 620 credit score for conforming loans after bankruptcy and foreclosure. However, the higher your score, the better your loan terms will be. If your credit score is below 620, you may need to work on rebuilding your credit or explore alternative loan options like non-QM loans.

Q: How can I Qualify Faster for Conforming Loans After Bankruptcy or Foreclosure?

A: Here are four things you can do to improve your chances of getting approved:

• Rebuild your credit – Pay all your bills on time and maintain low balances on your credit cards.
• Save for a down payment – A bigger down payment may help you qualify more easily.
• Keep a stable income – Lenders prefer to see two years of steady job history.
• Lower your debt-to-income (DTI) ratio – Pay down debt to improve your DTI.

Q: What if I Don’t Meet the Waiting Period for a Conforming Loan?

If you don’t meet the waiting period for a conventional conforming loan, you still have options!

• FHA Loan: 2-year wait after Chapter 7 bankruptcy, 1-year wait after Chapter 13, and 3-year wait after foreclosure.
• VA Loan: 2-year wait after Chapter 7 or foreclosure, 1-year wait after Chapter 13.
• Non-QM Loan: No waiting period required! This is an excellent option for borrowers with recent bankruptcies or foreclosures.

At Gustan Cho Associates, we offer non-QM loans with no tax returns required and flexible credit guidelines so you can buy a home faster.

Q: How Much Down Payment do I Need for Conforming Loans After Bankruptcy or Foreclosure?

The typical down payment for a conforming loan is:

• 5% down payment for most borrowers.
• 3% down payment if you’re a first-time homebuyer and meet income requirements.

If you save more for a down payment, it can help offset credit issues and improve your chances of approval.

Q: How do I get Pre-Approved for Conforming Loans After Bankruptcy or Foreclosure?

Getting pre-approved is easy! Follow these 3 steps:

• Step 1: Call us at 800-900-8569 or text us for a faster response.
• Step 2: Get a quick credit review—we’ll check your credit, income, and debt to find the best loan for you.
• Step 3: Start your pre-approval so you can shop for a home with confidence!

At Gustan Cho Associates, we specialize in getting approvals when other lenders say no.

Q: Can I get a Mortgage if My Bankruptcy or Foreclosure Still Shows on My Credit Report?

A: Yes! As long as you’ve met the waiting period and rebuilt your credit, you can still qualify for a mortgage—even if bankruptcy or foreclosure is still on your credit report. Even with past financial challenges, we’ve helped many borrowers get conforming loans after bankruptcy and foreclosure.

This blog about “Conforming Loans After Bankruptcy And Foreclosure” was updated on February 25th, 2025.