FHA Loan After Bankruptcy in New Mexico in 2022

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In this article, we will cover and discuss qualifying for an FHA after bankruptcy in New Mexico in 2022. The eligibility guidelines in qualifying for an FHA loan after bankruptcy in New Mexico are different when it comes to Chapter 7 versus Chapter 13. Both Chapter 7 Bankruptcy and Chapter 13 Bankruptcy give consumers a fresh start in life either. In the following paragraphs, we will cover and discuss qualifying for an FHA loan after bankruptcy. The most common types of bankruptcies for consumers are Chapter 7 and Chapter 13 Bankruptcy. HUD, the parent of HUD, has very different agency mortgage guidelines for Chapter 7 and Chapter 13 Bankruptcy. We will discuss the specific FHA loan requirements for both types of bankruptcy and the mortgage process.

How Long Do You Have To Wait To Apply For an FHA Loan After Bankruptcy in New Mexico?

Chapter 13 Bankruptcy Repayment Plans

Bankruptcy helps consumers with a fresh start with debts discharged or by reorganizing their debts into a repayment plan. Chapter 13 helps consumers restructure their debts where they can afford them and not be overwhelmed by the court’s approval. This includes being able to afford a mortgage.  Those who do not have little to no assets and not enough or no income can qualify for a Chapter 7 Bankruptcy. Chapter 7 enables consumers to completely wipe out their debts. Filers can start their life over again with no worries of debt collectors, wage garnishments, or their bank accounts being frozen. This includes qualifying for an FHA loan after bankruptcy in New Mexico.

When Can I Get Approved For FHA Loan After Bankruptcy in New Mexico?

Consumers who have assets and have income but are just too overwhelmed with debts can qualify for a Chapter 13 Bankruptcy which is a debt reorganization and restructuring program A percentage of the consumer’s monthly income is set aside wherewith those proceeds, the creditors get paid. With Chapter 13 Bankruptcy, the consumer enters into a 3 to 5-year repayment plan and after they complete the repayment plan, the remaining balance of their debts gets discharged and they no longer are responsible for any debts. Homebuyers can qualify for FHA after bankruptcy as long as they complete the minimum waiting period after Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.

FHA Loan After Chapter 7 Bankruptcy in New Mexico

Homebuyers can qualify for an FHA Loan After Bankruptcy if they had a Chapter 7 Bankruptcy after a two-year waiting period from their discharge date. Borrowers need re-established credit and a 580 minimum credit score with a 3.5% down payment. Lenders want to see no late payments after their Chapter 7 Bankruptcy discharge date and want to see re-established credit.

FHA Guidelines During Chapter 13 Bankruptcy in New Mexico

Importance Of Timely And Reestablished Credit During And After Bankruptcy

Homebuyers can qualify for an FHA Loan After Bankruptcy if they had a Chapter 13 Bankruptcy after one year into Chapter 13:

  • This holds true as long as they have been timely with all of their scheduled payments to their creditors and with the approval of their Chapter 13 Bankruptcy Trustee
  • If the home buyer has a Chapter 13 Bankruptcy discharge, then there is no waiting period
  • FHA Loan after Chapter 13 Bankruptcy either during Chapter 13 or with less than 2 year wait period after discharge date need to be manually underwritten

Borrowers will need a lender that is able to do manual underwriting.

FHA Loan With Late Payments After Bankruptcy in New Mexico

Re-established credit is required and no late payments after the Chapter 13 Bankruptcy are required:

  • Verification of rent is required on all manual underwriting
  • One month of PITI reserves is required

No late payments in the past 12 months, preferably the past 24 months.

What Credit Score Is Needed To Buy a House After Bankruptcy in New Mexico

Lenders will want to see that the FHA mortgage loan borrower has re-established credit after bankruptcy and that they have been timely with all of their credit payments since the bankruptcy. Late payments after bankruptcy can be a major issue when qualifying for an FHA Loan After Bankruptcy.

How Can I Build My Credit Fast After Bankruptcy

The quickest and easiest way of re-establishing credit after bankruptcy is by getting several secured credit cards. Secured credit cards are the same as regular unsecured credit cards except they require the consumer to put in a deposit. The secured credit card company will issue a credit limit equivalent to the deposit. There are an initial membership fee and annual membership fee for secured credit cards like standard unsecured credit cards. Secured credit card companies will report payment history to all three credit reporting agencies including late payments so never be late on any monthly payments.

How Soon Can I Qualify For FHA Loan After Bankruptcy in New Mexico

How Soon Can I Qualify For FHA Loan After Bankruptcy in New Mexico

Michael Gracz of Gustan Cho Associates is the author of Qualifying For FHA Loan After Bankruptcy. Mike Gracz is an associate contributing editor for Gustan Cho Associates Mortgage News. Michael Gracz is also the National Sales Manager for Gustan Cho Associates Mortgage Group and a national expert on government and conventional loans. Mike Gracz has a national reputation for being able to originate and fund mortgages other lenders cannot due to Gustan Cho Associates’ national no overlays business model.

Best Lenders For FHA Loan After Bankruptcy in New Mexico

Borrowers with a prior bankruptcy and need to qualify for an FHA Loan with a national direct lender with no overlays on government and conventional loans can contact Michael Gracz at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected]  Homebuyers can also apply online by clicking APPLY NOW. We are one of a few national direct lenders with zero overlays on FHA, VA, USDA, and Conforming Loans. Mike Gracz is also an expert on non-QM loans and bank statement loans for self-employed borrowers.