FHA Loan After Bankruptcy And Foreclosure Versus Other Loan Programs

This BLOG On FHA Loan After Bankruptcy And Foreclosure Was Updated On May 19, 2017

Home buyers can qualify for FHA Loan After Bankruptcy And Foreclosure after meeting the mandatory waiting period.

  • All government loans and conventional loan programs have minimum waiting period after bankruptcy and foreclosure.
  • Consumers who have filed bankruptcy and/or had a foreclosure, the chances are that their credit scores have suffered. 
  • A bankruptcy or foreclosure can plummet someone’s credit score more than 150 points or more. 
  • The good news with filing bankruptcy, consumers can have a fresh financial start in life and can start rebuilding their credit. 
  • Same as with a  foreclosure.  
  • Mortgage lenders do not go after the deficiency on a foreclosure on owner occupant residences.
  • Consumers can become homeowners again after bankruptcy and foreclosure.
  • Home buyers can qualify for FHA Loan after Bankruptcy and Foreclosure by meeting the HUD Guidelines on waiting period after Bankruptcy and Foreclosure

Credit After Bankruptcy And Foreclosure

A person’s credit score will automatically improve as time passes after filing bankruptcy even if they do not establish new credit.

  • A bankruptcy and foreclosure can plummet credit scores by 150 points or more.
  • This drop in credit scores is not permanent and will slowly increase as the bankruptcy and foreclosure ages even if consumers do not do nothing about improving their credit scores.
  • Many who file bankruptcy or go through foreclosure does not want to do anything with getting new credit.
  • However, not getting new credit after bankruptcy and/or foreclosure can affect chances of qualify for FHA Loan after bankruptcy and foreclosure.
  • Lenders want to see re-established credit after bankruptcy and foreclosure by borrowers.
  • Easiest and fastest way of rebuilding credit to qualify for FHA Loan after bankruptcy and foreclosure is to get three secured credit cards with $500 credit limits.
  • Any credit limit under $500 on secured credit cards will have very little effect in improving credit scores.
  • Most lenders will not approve borrowers for FHA Loan after bankruptcy and foreclosure if they had any late payments after bankruptcy, deed in lieu of foreclosure, foreclosure, short sale.

 How To Qualify For FHA Loan After Bankruptcy And Foreclosure

Here are HUD Guidelines On Qualifying For FHA Loans After Bankruptcy And Foreclosure:

  • There is a two year waiting period after Chapter 7 Bankruptcy discharged date to qualify for FHA Loans
  • Home buyers one year into a Chapter 13 Bankruptcy repayment plan can qualify for FHA Loans as long as they made 12 timely payments to their creditors and get approval from Chapter 13 Bankruptcy Trustee
  • There is no waiting period after Chapter 13 Bankruptcy discharged date to qualify for FHA Loans
  • There is no waiting period to qualify for a FHA Loan after a Chapter 13 Bankruptcy dismissal date
  • There is a three year waiting period to qualify for FHA Loans after the recorded date of a foreclosure, deed in lieu of foreclosure, short sale.
  • There is no waiting period to qualify for FHA Loan With Timeshare Foreclosure: Timeshares are considered consumer loans under the eyes of HUD
  • Borrowers who had a mortgage part of Chapter 7 Bankruptcy and the mortgage has been discharged in the Chapter 7 Bankruptcy, there is a three year period after the deed of transfer has taken place after the Chapter 7 Bankruptcy to qualify for FHA Loans
  • With Fannie Mae and Freddie Mac, borrowers who had mortgage part of Chapter 7 Bankruptcy can qualify four years from the discharged date of the Chapter 7 Bankruptcy and the transfer of deed date does not matter and can happen after the discharged date. As long as the deed transfer has taken place, Conventional borrowers can qualify for Conventional Loans four years from the discharged date of the Chapter 7 Bankruptcy.

Home buyers who need to qualify for FHA Loan After Bankruptcy And Foreclosure can contact Gustan Cho at 800-900-8569 or text Gustan on his cell at 262-716-8151 for faster response or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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