Can I Qualify For FHA Loan After Foreclosure And Bankruptcy?

The Federal Housing Administration, commonly known as FHA, is part of the United States Department of Housing and Urban Development. FHA, a governmental agency, is not a mortgage lender and has nothing to do with the origination, processing, underwriting, funding, and servicing of mortgage loans. What are FHA Loans then? FHA Loans are residential mortgage loans that are insured by the Federal Housing Administration to FHA approved private banks and mortgage companies in the event of mortgage borrower default. FHA will cover the loss of FHA mortgage lenders on FHA Loans. However, the mortgage lender needs to follow FHA lending guidelines in order for FHA Loans to be insurable by the Federal Housing Administration. Home buyers can qualify for FHA Loan After Foreclosure and Bankruptcy as long as they follow FHA mortgage lending guidelines after bankruptcy and foreclosure.

Qualifying For FHA Loan After Bankruptcy

Home buyers can qualify for FHA Loan After Bankruptcy after two years from the discharge date of their Chapter 7 Bankruptcy. The waiting period does not start until the actual discharged date of the Chapter 7 Bankruptcy and not the date the Chapter 7 Bankruptcy was filed. FHA expects no late payments after the Chapter 7 Bankruptcy discharged date and expects re-established credit after bankruptcy. Best way of rebuilding your credit after filing a Chapter 7 Bankruptcy is by getting several secured credit cards. Three to five secured credit cards are recommended with at least a $500 credit limit.

Home buyers can qualify for FHA After Chapter 13 Bankruptcy one year into the Chapter 13 Bankruptcy with the approval of the Bankruptcy Court. The mortgage loan borrower needs to have been timely with all monthly scheduled payments to their creditors. Verification of rent will be required because qualifying for a mortgage loan after Chapter 13 Bankruptcy are all manual underwrites.

Qualifying For FHA Loan After Short Sale

Home buyers can qualify for FHA Loan three years from the date of their short sale.  The waiting period date to qualify for FHA Loan After Short Sale starts from the date the HUD was signed and the short sale was closed. FHA expects no late payments after short sale and re-established credit from the FHA mortgage loan borrower and/or borrowers.

Qualifying For FHA Loan After Foreclosure And Deed In Lieu Of Foreclosure

Home buyers can now qualify for FHA Loan After Foreclosure and Deed In Lieu Of Foreclosure three years from the recorded date of the foreclosure that is reflected on county records and/or the date of sheriff’s sale of the property.  Many homeowners who had a foreclosure and/or deed in lieu of foreclosure many years ago do not qualify for FHA Loan After Foreclosure or Deed In Lieu Of Foreclosure because they just turned in the keys to their mortgage lender but the mortgage lender has not transferred the deed out of their names into the mortgage lender’s name.  A homeowner could have turned in their keys on January 1. 2010 and if the mortgage lender did not sell the property until January 1, 2015 or transferred the deed out of the homeowner’s name into their names and recorded it on January 1, 2015, the three year waiting period did not start until January 1, 2015 and that homeowner will not be eligible to qualify for a FHA Loan until January 1, 2018.

Mortgage Part Of Bankruptcy For FHA Loans

If you had a mortgage part of bankruptcy, there is a two year waiting period to qualify for a FHA Loan from the discharge date of the bankruptcy and three year waiting period to qualify for a FHA Loan from the recorded date of the foreclosure. Even though your mortgage loan balance got discharged through your Chapter 7 Bankruptcy, your waiting period will not start until the mortgage lender has transferred the deed out of your name into their name or until the home has sold.

Mortgage Part Of Bankruptcy For Conventional Loans

If you had a mortgage part of bankruptcy, there is a four year waiting period to qualify for a conventional loan from the discharged date of your Chapter 7 Bankruptcy even though the foreclosure was recorded at a later date. Conventional Loan lending guidelines on mortgage part of bankruptcy is quite different than qualifying for a FHA Loan After Bankruptcy.  If you had a mortgage part of bankruptcy or need to qualify for a mortgage loan after foreclosure, deed in lieu of foreclosure, short sale, or bankruptcy, please contact me at 262-716-8151 or email me at gcho@gustancho.com.

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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