Government And Conventional Loans After Bankruptcy And Foreclosure

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Government And Conventional Loans After Bankruptcy And Foreclosure

This BLOG On Government And Conventional Loans After Bankruptcy And Foreclosure Was PUBLISHED On December 11th, 2018

There are mandatory waiting period requirements on Government And Conventional Loans After Bankruptcy And Foreclosure.

  • Government Loans are residential home loans insured by a government agency
  • Government Loans are owner occupant mortgages
  • Second homes and investment homes are not insured by any government agencies
  • Second and Investment Home Loans are conventional loans, which are not guaranteed by the government

Government Loans And How Agencies Guarantee Lenders

Here are the three government loans:

  • HUD insures FHA Loans
  • Department of Veterans Affairs insures VA Home Loans
  • U.S. Department of Agriculture Rural Development insures USDA Loans

By government guarantee and insurance, the above agencies will insure lenders in the event borrowers were to default on the home loan. In order for government agency to insure lenders, mortgage lenders need to follow their specific mortgage guidelines.

Fannie Mae And Freddie Mac Guidelines On Conventional Loans

Conventional Loans are not government loans.

  • Conventional Loans are called conforming loans
  • Reason it is called conforming loans is because they need to conform to Fannie Mae and/or Freddie Mac Guidelines
  • Why do they need to conform to Fannie and/or Freddie Guidelines if they are not insured by the government?
  • Fannie Mae and/or Freddie Mac will not purchase loans by lenders that do not meet their lending guidelines
  • Mortgage Lenders do not want to hold the loans they fund for 30 years
  • They use their warehouse line of credit to fund conventional loans
  • After funding, lenders will sell these loans on the secondary market to either Fannie Mae and/or Freddie Mac
  • In order for Fannie/Freddie to purchase conventional loans, they need to conform to their guidelines
  • Waiting period after bankruptcy and/or foreclosure are one of the guidelines for Fannie Mae and Freddie Mac

Government And Conventional Loans After Bankruptcy And Foreclosure have mandatory waiting periods. Gustan Cho Associates at Loan Cabin Inc. offers non-qm loans where there are no waiting period after bankruptcy and/or foreclosure.

HUD Waiting Period Guidelines After Bankruptcy And Foreclosure

HUD is the parent of FHA.

Here are HUD’s Guidelines in qualifying for FHA Loans after bankruptcy and foreclosure:

  • 2 year waiting period after Chapter 7 Bankruptcy discharged date
  • Borrowers can qualify one year into their Chapter 13 Bankruptcy Repayment Plan:
    • Chapter 13 does not have to be discharged
    • Need Trustee Approval
    • Cannot be late on their Chapter 13 Repayment for past 24 months
  • There is no waiting period to qualify for FHA Loans after Chapter 13 discharged date
  • There is three year waiting period after finalization of foreclosure, short sale, deed in lieu of foreclosure
  • If there is mortgage included in bankruptcy, the waiting period is four years from the finalization of housing event and NOT discharged date of bankruptcy

USDA Waiting Period Guidelines After Bankruptcy And Foreclosure

USDA Loan Guidelines after bankruptcy and foreclosure are the following:

  • 3 year waiting period after Chapter 7 bankruptcy
  • 3 year waiting period after foreclosure, deed in lieu of foreclosure, short sale

VA Waiting Period Guidelines After Bankruptcy And Foreclosure

Department of Veterans Affairs has the following mortgage guidelines after bankruptcy and foreclosure:

  • There is two year waiting period after Chapter 7 Bankruptcy to qualify for VA Loans
  • There is two year waiting period after foreclosure, deed in lieu of foreclosure, short sale to qualify for VA Mortgages
  • Borrowers can qualify one year into their Chapter 13 Bankruptcy Repayment Plan:
    • Chapter 13 does not have to be discharged
    • Need Trustee Approval
    • Cannot be late on their Chapter 13 Repayment for past 24 months
  • Borrowers for VA Loans after Chapter 13 Bankruptcy discharged date with no waiting period
  • If there is mortgage included in bankruptcy, the waiting period is four years from discharged date of bankruptcy:
    • Mortgage cannot be re-affirmed
    • Finalization of housing event does not matter

Fannie Mae And Freddie Mac Guidelines After Bankruptcy And Foreclosure On Conventional Loans

Here are the conventional waiting period requirements after bankruptcy and foreclosure:

  • 4 year waiting period after Chapter 7 Bankruptcy discharged date
  • 2 year waiting period after Chapter 13 Bankruptcy discharged date
  • 4 year waiting period after Chapter 13 dismissal date
  • 4 year waiting period after deed in lieu of foreclosure and/or short sale
  • 7 year waiting period after foreclosure
  • If there is mortgage included in bankruptcy, the waiting period is four years from discharged date of bankruptcy:
    • Mortgage cannot be re-affirmed
    • Finalization of housing event does not matter

Gustan Cho Associates at Loan Cabin Inc. offers non-qm loans and bank statement loans for self employed borrowers. There is no waiting period after bankruptcy and/or housing event with non-qm and bank statement loans for self employed borrowers. To qualify for our loan programs, please contact us at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. The Gustan Cho Team at Loan Cabin is available 7 days a week, evenings, weekends, and holidays.

This BLOG On Government And Conventional Loans After Bankruptcy And Foreclosure Was PUBLISHED On December 11th, 2018

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