FHA Loan After Chapter 13 Bankruptcy in North Dakota

In this blog, we will discuss and cover the mortgage guidelines for getting qualified and approved for an FHA loan after Chapter 13 Bankruptcy in North Dakota. Gustan Cho Associates is a mortgage broker licensed in 48 states and is licensed in North Dakota. Bankruptcy is a fairly common legal option when one’s liabilities exceed their income and assets. Bankruptcies is a federal law that gives consumers a chance to discharge and/or restructure their debts and have a fresh financial start. Most folks do not realize that they can get credit and home loans after bankruptcy. Bankruptcies will plummet credit scores but that is only temporary.

How Bankruptcy Affects Your Credit Scores

As the bankruptcy age on the credit report, credit scores will gradually increase. Consumers can easily get their credit scores back up in the upper 600’s six months after a Chapter 7 or Chapter 13 Bankruptcy by getting secured credit cards. Home Buyers can qualify for FHA Loans After Chapter 13 and Chapter 7 Bankruptcy after meeting waiting period requirements. We will be discussing HUD Guidelines After Chapter 13 Bankruptcy in this blog.

Types Of Bankruptcy Options For North Dakota Consumers

The two most common forms of personal bankruptcies are chapter 7 bankruptcy and chapter 7 bankruptcy.  Borrowers can qualify for FHA Loans After Chapter 13  and 7 Bankruptcy. Chapter 13 is a reorganization bankruptcy (as opposed to a 7 which discharges all debts) designed for debtors with regular income who can pay back at least a portion of their debts through a repayment plan. If a bankruptcy petitioner makes too much money to qualify for Chapter 7 bankruptcy, they may have no choice but to file a Chapter 13 case.

How To Prepare To Qualify For an FHA Loan After Chapter 13 Bankruptcy in North Dakota

There are also other reasons for selecting chapter 13 over a chapter 7 bankruptcy. In a successful Chapter 13 bankruptcy, the debtor is usually able to keep their property but pays all or a portion of the debt owed over a period of 3 to 5 years. However, homebuyers who want a mortgage loan after filing chapter 13 cannot qualify for FHA Loans due to lender overlays. Many lenders have overlays on FHA Guidelines After Chapter 13 Bankruptcy. Most lenders will make mortgage loan applicants wait for 1 to 2 years after the discharge of the chapter 13 repayment plan.

What Are The Waiting  Period Requirements to Qualify for an FHA Loan After Chapter 13 Bankruptcy in North Dakota

There is no waiting period after the Chapter 13 Bankruptcy discharged date. The waiting period to qualify FHA Mortgage After Chapter 13 Bankruptcy is not HUD Guidelines but overlays. HUD agency guidelines do not require any waiting period to qualify for FHA Loans After the Chapter 7 Bankruptcy discharge date. But according to the new requirements for an FHA mortgage after chapter 13 bankruptcy launched on August 11, 2017, it is possible for homeowners and homebuyers to get a loan without a waiting period.

When Can You Apply For an FHA Loan After Filing For Chapter 13 Bankruptcy?

Note: Borrowers can qualify for FHA Loans one year into a Chapter 13 Bankruptcy repayment plan but needs to be a manual underwrite. Borrowers can qualify for a mortgage After the Chapter 13 Bankruptcy discharged date with no waiting period. However, if the borrower’s Chapter 13 Bankruptcy discharge has been seasoned less than 2 years, it needs to be a manual underwrite.

What Are Lender Overlays on FHA Loan After Chapter 13 Bankruptcy in North Dakota

There are two types of lending guidelines with FHA Loans:

Agency Guidelines Versus Lender Overlays on FHA Loan After Chapter 13 Bankruptcy in North Dakota

All lenders need to meet HUD Guidelines (HUD is the parent of FHA). Not all direct lenders need to go with the minimum FHA Guidelines and can have higher credit and underwriting requirements. This higher standard required by lenders is called lender overlays. For example, a home buyer can qualify for FHA loans one year into a Chapter 13 Bankruptcy repayment plan with Trustee Approval. However, it needs to be a manual underwrite.

Lender Overlays on Manual Underwriting by Lenders in North Dakota

A Lender can have overlays and not accept any manual underwrites. There is no waiting period to qualify for FHA Loans after Chapter 13 Bankruptcy. However, any chapter 13 bankruptcy discharge with less than two-year seasoning needs to be manually underwritten. Most lenders will require a one-year or two-year waiting period after a Chapter 13 Bankruptcy discharge date as part of their lender overlays even though it does not require it.

Qualifying For FHA Loan After Chapter 13 Bankruptcy in North Dakota

To summarize briefly, the following are a few points in the new guidelines to qualify for an FHA loan after Chapter Bankruptcy in North Dakota. Most lenders have overlays on FHA loan after Chapter 13 Bankruptcy in North Dakota where they impose a waiting period after the discharge date. We are a mortgage broker licensed in 48 states with wholesale lenders with minimum HUD guidelines for FHA loan after chapter 13 bankruptcy in Minnesota. If the chapter 13 bankruptcy has been discharged, there is no waiting period to qualify for the FHA loans. If the discharge has been seasoned for less than 2 years, the FHA loan will need to be manually underwritten.

Qualifying For FHA Loan After Chapter 13 Bankruptcy in Minnesota With Industry Experts at GCA

How to qualify for FHA loans

In conclusion, borrowers may not qualify for an FHA home loan after chapter 13 bankruptcy with a mortgage company that has overlays. However, as long as a borrower meets minimum HUD Guidelines, they can qualify with us. This means a qualified borrower often does not have to incur a waiting period after the Chapter 13 Bankruptcy discharge date in Minnesota. Therefore, It is often the best course of action for borrowers to seek FHA loan solutions with us at Gustan Cho Associates. The team at Gustan Cho Associates are experts in the following:

  • FHA Loans
  • VA Loans
  • USDA Loans
  • Conventional Loans
  • FHA 203k Loans
  • Reverse Mortgages
  • Jumbo Mortgages
  • Construction Loans
  • NON-QM Loans
  • Bank Statement Loans For Self Employed Borrowers
  • Condotel & Non-Warrantable Financing

Gustan Cho Associates Mortgage Group is available 7 days a week, on evenings, weekends, and holidays. For any questions on this topic or other mortgage topics, please contact us at 262-716-8151 or text us for a faster response. Or email us at [email protected]

Comments: 4

Leave a comment