FHA Loan After Bankruptcy And Foreclosure Versus Other Loan Programs

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FHA Loan After Bankruptcy And Foreclosure Versus Other Loan Programs

This BLOG On FHA Loan After Bankruptcy And Foreclosure Was Updated And Published On September 27th, 2019

What are FHA Loan After Bankruptcy And Foreclosure

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
  • 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
  • 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

In this article, we will cover and discuss FHA Guidelines after Bankruptcy and Foreclosure.

Credit After Bankruptcy And Foreclosure

what is 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
  • Scores will slowly increase as the bankruptcy and foreclosure ages
  • This holds true 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.

Importance Of Re-Establishing Credit After Bankruptcy And Foreclosure

How is Importance Of Re-Establishing Credit After Bankruptcy And Foreclosure

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

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
  • This holds true 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.

Fannie Mae Guidelines On Foreclosures And Bankruptcies

What are Fannie Mae Guidelines On Foreclosures And Bankruptcies

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:

  • The transfer of deed date does not matter and can happen after the discharged date
  • As long as the deed transfer has taken place, 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 us at Gustan Cho Associates at 262-716-8151 text us for faster response. Or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.

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