Conventional Loan After Bankruptcy And Foreclosure Mortgage Guidelines

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Conventional Loan After Bankruptcy And Foreclosure Mortgage Guidelines

This BLOG On Conventional Loan After Bankruptcy And Foreclosure Mortgage Guidelines Was UPDATED On July 21st, 2018

There are mandatory waiting period to qualify for a conventional loan after bankruptcy and foreclosure. Waiting periods to qualify on conforming is different for government loans after bankruptcy and foreclosure.

  • Conventional Loans are often called Conforming Loans
  • This is because they need to meet and conform to Fannie Mae or Freddie Mac guidelines
  • Fannie Mae and Freddie Mac are the two government sponsored enterprises
  • The two mortgage giants that sets conventional mortgage guidelines
  • In order for banks and mortgage companies to be able to sell the residential mortgage loans to Fannie Mae and/or Freddie Mac, those loans need to conform to the standards and guidelines set by Fannie Mae and/or Freddie Mac
  • Borrowers can qualify for conventional loan after bankruptcy and foreclosure as well as deed in lieu of foreclosure and short sale by meeting mandatory waiting period requirements
  • Lenders expect re-established credit after bankruptcy, foreclosure, deed in lieu of foreclosure, and short sale

Qualifying For Conventional Loan After Bankruptcy

Borrowers can qualify for a conventional loan after a Chapter 7 Bankruptcy four years from the discharge date.

  • Minimum of a 620 credit score is required
  • Lenders expect to see re-established credit after the Chapter 7 Bankruptcy
  • No late payments after the Chapter 7 Bankruptcy and/or housing event
  • Borrowers can qualify for a conventional loan after a Chapter 13 Bankruptcy two years after the discharge date
  • Four years after a Chapter 13 dismissal date
  • Minimum of 620 credit score
  • Re-established credit after the Chapter 13 Bankruptcy
  • No late payments after the Chapter 13 Bankruptcy discharge and/or Chapter 13 Bankruptcy dismissal date

Qualifying For Conforming Loan With Mortgage Included In Bankruptcy

Borrowers with mortgage included in bankruptcy, the waiting period to qualify for a conventional loan is four years from the discharge date of Chapter 7 Bankruptcy.

  • Foreclosure can be recorded after the discharge date of your Chapter 7 Bankruptcy discharge date
  • However, the recorded date of the housing event does not matter and but the housing event needs to be finalized 
  • The four year waiting period starts on the discharge date of Chapter 7 Bankruptcy
  • This rule is only for conventional, VA, and USDA Loans
  • Does not apply for FHA Loans
  • With FHA Loans, borrowers with mortgage part of bankruptcy, the waiting period of three years starts from the recorded date of the foreclosure
  • Not the discharge date of Chapter 7 Bankruptcy

Re-established credit and no late payments after the bankruptcy is required. 620 credit score minimum is required.

Qualifying For Conventional Loan After Deed In Lieu Of Foreclosure And Short Sale

Borrowers can qualify for a conventional loan after deed in lieu of foreclosure and short sale after four years. 3% to 5% down payment is required:

  • Minimum credit scores required is 620 credit scores and re-established credit is required
  • Lenders do not want to see any late payments after the deed in lieu of foreclosure and/or short sale

Qualifying For Conventional Loan After Foreclosure

Borrowers can qualify for a conventional loan seven years after foreclosure with re-established credit and no late payments after the foreclosure.

  • The seven year waiting period after foreclosure time clock starts from the date of the Sheriff’s sale
  • Or the date where the deed of the property was transferred out of their names into the name of either the lender or another home buyer

Qualify Now For Conventional Loan After Bankruptcy And Foreclosure

Home buyers who need to qualify for conventional loan after bankruptcy and foreclosure with a national direct lender with no overlays, contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Our team of licensed mortgage loan originators have no lender overlays. We can help home buyers who have credit issues or with prior bad credit.  We are available 7 days a week, evenings, and holidays.

1 Comment
  1. Gustan Cho, NMLS 873293 says

    We at Gustan Cho Associates offer non qm loans where there is no waiting period after Bankruptcy discharged date. Non qm loans has no private mortgage insurance required. No loan limits.

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