Gustan Cho The Mortgage Expert,
Publish On: November 23, 2022
This blog will discuss HUD bankruptcy guidelines after Chapter 7 and Chapter 7 bankruptcy on FHA loans. HUD Bankruptcy Guidelines state that borrowers can qualify for FHA loans after Chapter 7 and 13 Bankruptcy. Many homebuyers, especially first-time home buyers, think getting a mortgage is next to impossible after filing for bankruptcy. This is not true. Bankruptcy will initially plummet consumer credit scores by 100 plus points. However, this big drop is a temporary drop.
Credit scores will go back up as the bankruptcy ages. Credit scores can go up faster if consumers get new revolving credit after the bankruptcy discharge. Secured credit cards are the easiest and fastest way to re-establish credit after bankruptcy. In this blog, we will discuss HUD Bankruptcy Guidelines after Chapter 7 and Chapter 13 Bankruptcy.
Is It Possible To Get Mortgage After Bankruptcy?
Bankruptcy is a federal law that allows consumers a fresh start in their financial life. A bankruptcy discharge will discharge most consumer debts so consumers can have a fresh start in life.
Outstanding collections, repossession charge-offs, charge-off accounts, foreclosure deficits, judgments, and personal debts all get discharged in bankruptcy. Certain debts, such as government debts, federal student loans, tax liens, and other non-exempt debts, cannot be discharged in bankruptcy.
Re-Establishing Credit After Bankruptcy
Homebuyers often re-establish themselves after a bankruptcy discharge. They often re-establish their credit, are successful with their current and new job, save money, and are ready to qualify for a home loan. Homebuyers can qualify for a home loan after bankruptcy.
Government and conventional loans require a mandatory waiting period after bankruptcy. Gustan Cho Associates has an alternative loan program, non-QM mortgages, with no waiting period after bankruptcy and foreclosure. NON-QM Loans are becoming increasingly popular among our borrowers at Gustan Cho Associates.
Chapter 7 and Chapter 13 of HUD Bankruptcy Guidelines
Here are HUD Bankruptcy Guidelines for qualifying for FHA loans. There is a two-year waiting period after the Chapter 7 Bankruptcy discharge date to qualify for FHA loans. Borrowers can qualify for FHA loans one year into a Chapter 13 Bankruptcy Repayment Plan with Trustee Approval via manual underwriting.
Can I Get Approved For an FHA Loan During and After Chapter 13 Bankruptcy?
FHA and VA loans are the only two mortgage loan programs that allow homebuyers during Chapter 13 Bankruptcy repayment plan to qualify for a mortgage loan without the bankruptcy being discharged.
Chapter 13 Bankruptcy does not have to be discharged. There is no waiting period after the Chapter 13 Bankruptcy discharge date, but it needs to be manually underwritten if the discharge has not been seasoned for 24 months.
HUD 4000.1 FHA Handbook on FHA Loans
According to HUD 4000.1 FHA Handbook:
For more information on this blog or other topics, please contact Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. Gustan Cho Associates and its subsidiaries are available seven days a week, evenings, weekends, and holidays. Gustan Cho Associates, empowered by NEXA Mortgage, LLC, are mortgage brokers licensed in 48 states, including Washington, DC, Puerto Rico, and the U.S. Virgin Islands.
