In this blog, we will cover and discuss HUD guidelines after bankruptcy versus other mortgage loan programs. Per HUD guidelines after bankruptcy, borrowers can qualify for FHA loans after Chapter 7 and Chapter 13 Bankruptcy. However, there are different HUD Guidelines After Bankruptcy requirements on Chapter 7 versus Chapter 13 Bankruptcy. Many folks who file bankruptcy think there is no possible way to qualify for home loans after bankruptcy.
Qualifying and Getting Pre-Approved For an FHA Loan After Bankruptcy
HUD Guidelines After Bankruptcy has lenient lending requirements for those folks who had a prior bankruptcy. There are waiting period requirements to qualify for government and conventional loans after bankruptcy. Gustan Cho Associates at has non-QM Loans where there are no waiting period requirements after bankruptcy, foreclosure, short-sale, deed in lieu of foreclosure. Gustan Cho Associates are mortgage consultants licensed in multiple states with no lender overlays on government and conventional loans. In this blog, we will discuss HUD Guidelines After Bankruptcy versus other loan programs.
HUD Guidelines After Bankruptcy Eligibility Requirements
HUD is the parent federal agency of FHA. HUD sets HUD Guidelines After Bankruptcy Mortgage Guidelines. Here are the HUD Guidelines After Bankruptcy Mortgage Eligibility Requirements:
- There is a two-year waiting period after Chapter 7 Bankruptcy discharged date to qualify for FHA loans
- Borrowers can qualify for FHA loans after making 12 monthly timely payments to the Bankruptcy Trustee during Chapter 13 Bankruptcy Repayment Plan
- Chapter 13 Bankruptcy does not need to be discharged
- Needs to be a manual underwrite
- There is no waiting period after Chapter 13 Bankruptcy discharge date
- If the Chapter 13 discharge has not been seasoned for two years, it needs to be a manual underwrite
- Outstanding collections and charge off accounts do not have to be paid to qualify for FHA loans
- The minimum credit score to qualify for a 3.5% down payment FHA home purchase loan is 580 FICO
- Borrowers with credit scores under 580 FICO can qualify for FHA loans with a 10% down payment
- The minimum credit score HUD Guidelines allow is 500 FICO to qualify for FHA loans
HUD Guidelines After Bankruptcy: Preparing To Qualify For FHA Loans After Bankruptcy
Potential home buyers should start early prepare in qualifying for FHA loans after bankruptcy. Getting qualified for any loan program takes time to prepared after bankruptcy. Avoid any late payments after bankruptcy. Late payments after bankruptcy and/or housing event is viewed as a second offender by all lenders. Most lenders will not welcome borrowers with late payments after bankruptcy and/or foreclosure. One of two late payments after bankruptcy and/or foreclosure is not always a deal killer but it is viewed extremely negatively by all lenders.
Re-Establishing Credit After Bankruptcy To Qualify For A Mortgage
Gustan Cho Associates helps borrowers qualify for FHA loans after bankruptcy with late payments. Try to get 3 to 5 secured credit cards after your bankruptcy discharge. Secured credit cards are the easiest and fastest way of re-establishing your credit after bankruptcy. For maximum optimization, get three to five secured credit cards with at least a $500 credit limit. Any credit card with under $500 credit limit will have little effect in raising credit scores. As your secured credit card ages, your credit scores will improve.
Other Important Tips In Preparing For FHA Loans After Filing Bankruptcy
Enroll in a credit monitoring service like Credit Karma.com or MyFico.com. Make sure there are no errors on your credit report. Make sure that credit card balances are at a 10% or lower credit utilization ratio. Never close out revolving accounts. Aged revolving accounts determine your credit profile. Do not apply for senseless credit. Hard credit inquiries will drop your credit scores. Make sure you are not a victim of identity theft. Do not co-sign for anyone. Co-Signing will affect your debt-to-income ratios and buying power on a home purchase. Do not hesitate to contact your loan officer if you have any questions.
