FHA Chapter 13 Bankruptcy Guidelines To Qualify For Mortgage

Gustan Cho Associates
0

FHA Chapter 13 Bankruptcy Guidelines To Qualify For Mortgage

This BLOG On VA And FHA Chapter 13 Bankruptcy Guidelines To Qualify For Mortgage Was UPDATED On December 7th, 2018

Both FHA and VA Guidelines in qualifying for mortgage during and after Chapter 13 Bankruptcy are the same.

VA And FHA Chapter 13 Bankruptcy Guidelines Update:

  • Many home buyers who are either in a Chapter 13 Bankruptcy Repayment Plan or just had a Chapter 13 Bankruptcy discharged are often confused when they consult with lenders to see if they qualify for VA and/or FHA Loans
  • One of the most often questions I get from my borrowers are the different types of answers they get from lenders who they consult with on the waiting period
  • Most lenders have overlays on government and conventional loans
  • Just because borrowers are told no by one lender does not mean they do not qualify with another lender with no mortgage overlays
  • They get different answers as of the waiting period during and after Chapter 13 Bankruptcy in qualifying for FHA Loans and VA Loans
  • Loan officers give these folks different answers
  • One lender may tell a borrower that there is a one year waiting period to qualify for VA Loans and FHA Loan After Chapter 13 Bankruptcy  while another lender may say it is a two year period after a Chapter 13 Bankruptcy discharged date to qualify
  • The true and real answer per VA and FHA Chapter Bankruptcy Guidelines is that there is no waiting period to qualify for VA and FHA Loan after a Chapter 13 Bankruptcy Discharge Date
  • Borrowers can qualify for FHA and VA Loans during Chapter 13 Repayment Period after one year into the plan
  • Needs to be a manual underwrite if the Chapter 13 Bankruptcy discharge has not been seasoned for two years on VA and FHA Home Loans
  • We will go into details on how a borrower can qualify for VA and FHA Loans per VA and FHA Chapter Bankruptcy Guidelines on this BLOG
  • Will cover the mechanics on qualifying for VA and FHA Loans for both Chapter 7 Bankruptcy and Chapter 13 Bankruptcy
  • A borrower can also qualify for VA and FHA Loans one year into a Chapter 13 Bankruptcy Repayment Plan  per VA and FHA Chapter Bankruptcy Guidelines

Qualifying For FHA Loans After Chapter 7 Bankruptcy And Chapter 13 Bankruptcy

Under both VA and FHA Chapter Bankruptcy Guidelines, the waiting period to qualify for a FHA Loan after a Chapter 7 Bankruptcy.is two years after the discharge dates of Chapter 7 and Chapter 13 Bankruptcies for an automated underwriting system approval.

  • However, there is an exemption with qualifying for VA and FHA Loan After Chapter 13 Bankruptcy Discharge date
  • The exceptions is there is NO WAITING PERIOD AFTER A CHAPTER 13 BANKRUPTCY DISCHARGED DATE as long as the borrower’s mortgage application is manually underwritten on both VA Home Loans and FHA Loans
  • Borrowers will not get an approve/eligible unless the Chapter 13 Bankruptcy discharged date has been seasoned for at least two years so that is why it needs to be manually underwritten
  • Remember that all manual underwrites needs verification of rent

Qualifying For VA And FHA Loan After Chapter 7 Bankruptcy

Here are the qualification requirements on qualifying for FHA  Guidelines Loan After Chapter 7 Bankruptcy

Borrowers can qualify for VA and FHA Loan two years after a Chapter 7 Bankruptcy discharged date.

Here are the requirements in qualifying for VA and FHA Loan after a Chapter 7 Bankruptcy discharged date:

  • Two years needs to have elapsed from the discharged date of the Chapter 7 Bankruptcy discharged date
  • The borrower must have re-established credit and timely payment history after the Chapter 7 Bankruptcy discharge to qualify for both VA and FHA Loans
  • Late payments after a Chapter 7 Bankruptcy is considered extremely bad and most lenders will not qualify borrowers with late payments after bankruptcy and/or housing event
  • Most lenders will not approve a borrower with any late payments after a Chapter 7 Bankruptcy discharge no matter how small the monthly payment may be
  • Late Payments after bankruptcy and/or foreclosure are not automatic deal killers
  • There are cases where borrowers with late payments can qualify for a FHA Loan after late payments after Chapter 7 Bankruptcy discharged date 
  • Contact Gustan Cho at 262-716-8151 or email at gcho@gustancho.com if this is the case

FHA Loan During Chapter 13 Bankruptcy Process

Qualifying For VA And FHA Loan During Chapter 13 Bankruptcy Repayment Period

FHA Chapter 13 Bankruptcy Guidelines state that a borrower can qualify for a FHA Loan as long as they meet the following guidelines. It is the same with VA Home Loans:

  • A borrower can qualify for VA and FHA Loan one year into the Chapter 13 Bankruptcy Repayment Plan
  • 12 months of timely payments need to have been made and proof of payment needs to be provided to mortgage lender
  • Bankruptcy Trustee needs to approve of mortgage loan if the borrower is into a Chapter 13 Bankruptcy Repayment Plan
  • Borrower needs to have verification of rent where 12 months canceled checks for their rent and/or bank statements showing timely payment for their rental payment
  • If borrower is renting from a property management company, a VOR Form completed by the property manager is sufficient in lieu of canceled checks and/or 12 months banks statements
  • Verification of rent form is provided by lender which the property manager of the property management company needs to complete sign, date, and stamp
  • All VA and FHA Loans during and after Chapter 13 Bankruptcy discharge date are all manual underwriting and compensating factors is a must
  • One or more late payments during the Chapter 13 Bankruptcy Repayment Period can be an automatic disqualification

VA And FHA Lenders With No Lender Overlays

VA and FHA Chapter 13 Bankruptcy Guidelines state there is no waiting period to qualify for VA and/or FHA Loan after Chapter 13 Bankruptcy discharged date.

  • Many lenders who tell borrowers that there is a one year waiting period or two year waiting period to qualify for VA and FHA Loan after Chapter 13 Bankruptcy discharged date are those who have Lender Overlays
  • Lenders can have additional stricter lending requirements called Overlays which is above and beyond the minimum FHA and VA Guidelines

Home Buyers looking for a Lender with no lender overlays on government and conventional loans, contact Gustan Cho Associates at 262-716-8151 or email Gustan Cho at gcho@loancabin.com. The Gustan Cho Team at Loan Cabin Inc. is available 7 days a week, evenings, weekends, and holidays.

This BLOG On FHA Chapter 13 Bankruptcy Guidelines Was UPDATED On December 7th, 2018

Leave A Reply

Your email address will not be published.

CALL NOW