Conventional Loan Waiting Period After Housing Event And Bankruptcy

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Conventional Loan Waiting Period After Housing Event And Bankruptcy

This BLOG On Conventional Loan Waiting Period After Housing Event And Bankruptcy Was UPDATED On September 20th, 2018

Conventional Loan Waiting Period Explained

There are Conventional Loan Waiting Period requirements after bankruptcy, foreclosure, deed in lieu of foreclosure, and short sale.

  • Fannie Mae and Freddie Mac are the two mortgage giants that make up the conventional mortgage lending guidelines
  • Fannie Mae And Freddie Mac sets the conventional loan waiting period
  • The conventional waiting period after a Chapter 7 Bankruptcy is 4 years from the discharge date of the Chapter 7 Bankruptcy
  • The conventional waiting period after Chapter 13 Bankruptcy is two years from the discharged date of the Chapter 13 Bankruptcy
  • There is a four year waiting period after Chapter 13 discharged date

Conventional Loan Waiting Period After Housing Event

Conventional waiting period after a deed in lieu of foreclosure and short sale is four years from the recorded date of the deed in lieu of foreclosure:

  • There is a four year waiting period after the date of the short sale to qualify for conforming loans
  • The Conventional Waiting Period after foreclosure to qualify for a conventional loan is seven years
  • The waiting period start date is the date of the sheriff’s sale and/or the date the deed of the property was transferred out of the borrower’s name into the name of the lender and recorded on public records

Other Factors Besides Waiting Period After Bankruptcy And Foreclosure

Besides passing the mandatory waiting period after bankruptcy, foreclosure, deed in lieu of foreclosure, and/or short sale borrowers need to meet Fannie Mae and/or Freddie Mac lending guidelines with regards to credit scores, credit, and debt to income ratios.

  • The minimum credit score to qualify for a conventional loan is 620 FICO credit scores
  • The maximum debt to income ratios allowed on conventional loans is 50% DTI
  • Lenders do not want to see any late payments after bankruptcy, foreclosure, deed in lieu of foreclosure, and short sale
  • Most lenders will automatically deny a mortgage loan if they see any late payments after bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale
  • However, there are lenders like myself where we are more lenient on late payments after bankruptcy and/or foreclosure
  •  Mortgage underwriter will want to see the overall picture and a good letter of explanation may do the trick

Home buyers with multiple late payments after bankruptcy and/or foreclosure and need to qualify for a conventional loan please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@gustancho.com. We are available 7 days a week including evenings, weekends, and holidays to take your phone calls or answer your emails.

Conventional Loan Waiting Period If Mortgage Part Of Bankruptcy

Many consumers have their mortgage or mortgages as part of bankruptcy the waiting period to qualify for a conventional loan is four years from the discharge date of the Chapter 7 Bankruptcy.

  • The foreclosure can be recorded after the discharged date of the Chapter 7 Bankruptcy
  • The recorded date of the foreclosure and/or short sale does not matter
  • However, the housing event does need to be finalized
  • Fannie Mae and Freddie Mac only counts the waiting period start clock from the minute the Chapter 7 Bankruptcy has been discharged
  • The mortgage cannot be reaffirmed after the bankruptcy

Lenders also want to see re-established credit after bankruptcy and foreclosure and timely payments on all of the monthly debt obligations.

If you had a mortgage part of Chapter 7 Bankruptcy but the foreclosure did not get recorded out of your name until years after the bankruptcy discharged date and need to qualify for a conventional loan, please contact me at 262-716-8151 or email me at gcho@gustancho.com. I may be able to help you get a conventional mortgage loan approval.

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