You Can Get a Home Loan After Chapter 7 Bankruptcy!
A lot of folks are surprised to find out that you can qualify for a home loan two years after going through Chapter 7 bankruptcy. With everything that’s happened recently, mainly because of the pandemic, many people are bouncing back financially. You usually have to wait two to four years to get a mortgage, depending on the lender and the type of loan. By taking steps to enhance your credit score, you can boost your likelihood of securing a mortgage when you are prepared to purchase a home.
There Is Life After Bankruptcy: Qualifying For Home Loan After Chapter 7 Bankruptcy
In today’s challenging economic climate, many individuals face financial hardships due to rising inflation, unexpected job losses, or overwhelming medical debt. It’s a tough reality that can lead even the most responsible borrowers to consider bankruptcy as a necessary option.
The good news is that bankruptcy provides a legal framework designed to help consumers regain their financial footing and achieve a fresh start. While it may feel daunting, there is indeed life after bankruptcy. Those who have navigated this difficult journey can still qualify for a mortgage and become homeowners once again.
As the housing market changes, many lenders provide loan options for people recovering from bankruptcy. By having the right information and taking initiative, you can discover these possibilities and strive towards becoming a homeowner. This helps you put the past behind you and focus on a better financial future.
Ready to Buy a Home After Chapter 7 Bankruptcy? We Can Help You Qualify!
It’s possible to get a home loan even after a Chapter 7 bankruptcy. Contact us today to explore your options and get pre-approved for a home loan, no matter your past financial struggles.
Types Of Bankruptcies And Home Loan After Chapter 7 Bankruptcy
There are two types of bankruptcies:
Chapter 7 Bankruptcy and Home Loans
Chapter 7 bankruptcy can be a solid option for folks dealing with a lot of unsecured debt while not bringing in much money. Just keep in mind, there’s an income cap—if you’re making too much, you won’t be able to go for Chapter 7 and might have to look at Chapter 13 instead.
Thinking about buying a house? Good news! You are eligible for an FHA loan two years after your Chapter 7 case ends. But if you’re set on a conventional loan, you’ll need to wait four years.
Chapter 13 Bankruptcy and Home Loans
Chapter 13 Bankruptcy helps you organize your debt. To choose this option, you need a steady job or regular income. This is a good choice for people with income and some equity in their home and other assets. When you file for Chapter 13, a Bankruptcy Trustee will help you manage your case. They will look at your income and decide how much to pay your creditors. The repayment plan usually lasts between three to five years. Once you finish the plan, all remaining debts are wiped out.
If you are in a Chapter 13 Bankruptcy Repayment Plan, you can apply for an FHA Loan after one year, but you need the Trustee’s approval. Once your Chapter 13 is discharged, you can get an FHA Loan immediately. However, if it has been less than two years since your discharge, you will have to go through a manual underwriting process. This means you need to show proof of your rent payments.
Qualifying For Home Loan After Chapter 7 Bankruptcy
If you have few or no assets, Chapter 7 Bankruptcy can protect you from further collection efforts and wipe out all your debts once it is discharged. After your Chapter 7 Bankruptcy is discharged, you must wait two years before qualifying for an FHA mortgage loan. For a conventional loan, the waiting period is four years after your bankruptcy discharge.
Qualifying For Home Loan After Chapter 13 Bankruptcy
There are two main types of bankruptcy: Chapter 13 is one of them. This type is meant to help people protect their assets and give them time to reorganize their debts. To file for Chapter 13, you must have an income, whether from a job or your business.
If you file for Chapter 13, you must wait one year before qualifying for an FHA-insured mortgage loan. You also need the approval of the bankruptcy trustee.
If your Chapter 13 Bankruptcy is discharged, you can immediately qualify for an FHA-insured mortgage loan with no waiting period. However, if your Chapter 13 is dismissed, you must wait two years before you can get an FHA-insured mortgage loan.
For conventional loans, if your Chapter 13 Bankruptcy is discharged, you need to wait two years from the discharge date. If your Chapter 13 is dismissed, you will have to wait four years from the dismissal date to qualify for a conventional loan.
Yes, You Can Get a Mortgage After Chapter 7 Bankruptcy
FHA, VA, and non-QM loans may allow you to buy again in as little as 2 years.
Judgments And Other Debts
One major benefit of bankruptcy is that it can help you get rid of many judgments against you. These judgments can harm your credit for years and stay on your record for up to ten years. Creditors can sometimes renew these judgments, extending their lifespan even further. This situation can be incredibly stressful, as creditors may resort to wage garnishments or seizing money from your bank account.
Filing for bankruptcy, especially Chapter 7, can help eliminate those judgments that are weighing you down financially. Plus, wiping out those judgments can boost your credit report and even make it easier to snag a home loan down the road. This shows just how much sorting out those judgments can open up new financial opportunities for you in the future.
New Fannie Mae Rules: When Does the Waiting Period Start?
Suppose you included your mortgage in your Chapter 7 Bankruptcy. In that case, it’s important to understand the new waiting period for qualifying for a conventional home loan. Previously, the waiting period started from the recorded date when the deed was transferred from your name to the mortgage lender, which could take years after the bankruptcy discharge.
Under the new Fannie Mae guideline, the waiting period is now simpler: it starts from the discharge date of your Chapter 7 Bankruptcy. This means that both the foreclosure and bankruptcy waiting periods begin on the discharge date, and you can qualify for a conventional loan four years from this date.
Keep in mind that, no matter when the foreclosure was filed, the main guideline is that the waiting time for a conventional loan is consistently four years from the discharge date of your Chapter 7 Bankruptcy.
Borrowers who need a five-star national mortgage company licensed in 48 states with no overlays and who are experts on home loans after Chapter 7 bankruptcy, please contact us at 800-900-8569, text us for a faster response, or email gcho@gustancho.com.
Frequently Asked Questions About Home Loan After Chapter 7 Bankruptcy:
Q: Can I Really Get a Home Loan After Chapter 7 Bankruptcy?
A: Yes! You can qualify for a home loan after Chapter 7 bankruptcy. There’s a waiting period, but it’s absolutely possible.
Q: How Long Must I Wait for a Home Loan After Chapter 7 Bankruptcy?
A: You must wait 2 years after your Chapter 7 bankruptcy discharge for FHA loans. For conventional loans, it’s a 4-year wait.
Q: Does Bankruptcy Ruin My Chances of Ever Repurchasing a Home?
A: No, bankruptcy doesn’t stop you from buying a home forever. It gives you a fresh start. Many borrowers successfully get a home loan after Chapter 7 bankruptcy.
Q: What Type of Home Loan is Easiest to Get After Chapter 7 Bankruptcy?
A: An FHA loan is usually the easiest home loan after Chapter 7 bankruptcy because the waiting period is shorter and credit guidelines are more flexible.
Q: Do I have to Rebuild My Credit First Before Getting a Home Loan After Chapter 7 Bankruptcy?
A: Yes. Rebuilding your credit right after bankruptcy is important. Pay your bills on time and manage new credit carefully to qualify faster.
Q: Can I Qualify for a Conventional Home Loan After Chapter 7 Bankruptcy?
A: Yes, you can qualify for a conventional home loan 4 years after your Chapter 7 bankruptcy discharge date.
Q: If My Home were Included in the Bankruptcy, Can I Get a New Home Loan?
A: If your former mortgage was part of your bankruptcy, the countdown starts from your bankruptcy discharge date, rather than the foreclosure date. You are eligible for a conventional mortgage 4 years after your discharge.
Q: Can Filing for Bankruptcy Remove Judgments from My Credit Report?
A: Yes, filing Chapter 7 bankruptcy can remove most judgments. This helps clear your financial record, making it easier to get a home loan after Chapter 7 bankruptcy.
Q: What’s the Quickest Home Loan Option After Chapter 7 Bankruptcy?
A: FHA loans offer the quickest route to homeownership after Chapter 7 bankruptcy, requiring only a 2-year waiting period.
Q: Who Can Help Me Qualify for a Home Loan After Chapter 7 Bankruptcy?
A: Mortgage experts specializing in home loans after bankruptcy can guide you through the process and help you get approved. Contacting a mortgage professional is your best step.
This blog about “Qualifying For Home Loan After Chapter 7 Bankruptcy” was updated on July 28th, 2025.
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