HUD Waiting Period Guidelines After Chapter 13 on FHA Loans

In this blog, we will discuss and cover HUD waiting period guidelines after Chapter 13 on FHA loans. Why is it many lenders say there is a one or two-year waiting period after Chapter 13 discharge date? This is what many home buyers who are in a Chapter 13 Bankruptcy Repayment Plan want to know. Many homebuyers are getting conflicting reports from various lenders regarding the HUD waiting period guidelines after Chapter 13 on FHA loans. Many of our viewers are getting mixed answers from lenders when asked about qualifying for an FHA Loan after Chapter 13 Bankruptcy discharge date.

HUD Waiting Period Guidelines After Chapter 13 Versus Overlays By Lenders

We will clarify in qualifying HUD waiting period guidelines after Chapter 13 on FHA loans.  There are two different types of guidelines. The most important guidelines you need to pay attention to are HUD waiting period guidelines after Chapter 13 Bankruptcy. Lenders can have different guidelines. All lenders need to make sure borrowers meet the HUD waiting period guidelines after Chapter 13 Bankruptcy. However, lenders can have higher lending requirements that are above and beyond the HUD waiting period guidelines after Chapter 13 Bankruptcy on FHA loans. Homebuyers will qualify for a mortgage after Chapter 13 Bankruptcy with no waiting period after Chapter 13 Bankruptcy.

How Can I Find a Lender That Has No Overlays and Will Go Off The HUD Waiting Period Guidelines After Chapter 13 Bankruptcy

Homebuyers can qualify for an FHA Loan during and after Chapter 13 Bankruptcy. We will cover when homebuyers can qualify for an FHA loan during Chapter 13 Bankruptcy. Unfortunately, many borrowers are told conflicting statements by lenders. Many borrowers think all FHA lenders have the same guidelines. However, this is not true. Some loan officers do not know the HUD waiting period guidelines after Chapter 13 Bankruptcy because they work for a mortgage company with overlays. There is no waiting period to qualify for an FHA loan after Chapter 13 per HUD Waiting Period Guidelines After Chapter 13.

When Can I Qualify For an FHA Loan After Filing Chapter 13 Bankruptcy

Borrowers can qualify for an FHA Loan During the Chapter 13 Bankruptcy Repayment Period one year into their Chapter 13 Bankruptcy Repayment Plan. The borrower will need the approval of their Chapter 13 Bankruptcy Trustee which is not a problem. I have never seen a case where Chapter 13 Bankruptcy Trustee does not approve the borrower of a home loan. This holds true as long as they were able to afford the monthly mortgage payment.

HUD Credit Guidelines For Chapter 13 Bankruptcy Borrowers

A borrower needs to have been timely will all of their monthly payments since the start of their Chapter 13 Bankruptcy Repayment. The borrower needs verification of rent which is 12 months of canceled checks of their rent payment, and 12 months of bank statements showing timely monthly mortgage payments. If the borrower has been renting from a registered property management company, then a VOR form completed by the property management company which the form is provided by the lender can be used in lieu of the 12 month canceled checks and/or bank statements. The mortgage file needs to be manually underwritten. Compensating Factors are required.

HUD Waiting Period Guidelines After Chapter 13 on Applying For an FHA Loan After or Before Discharge

Is It Better To Apply For FHA Loan After Chapter 13 Bankruptcy Discharge? This is where many borrowers get really confused by the answers being told by various lenders. Many borrowers are told that they would qualify for an FHA loan while in Chapter 13 Bankruptcy Repayment Plan. However, they DO NOT qualify for an FHA loan after Chapter 13 Bankruptcy discharge unless they pass a two-year waiting period. Does this make sense?  For most of us, this does not make sense. There are many lenders that will require a waiting period after a Chapter 13 Bankruptcy discharge date of one to two years.

HUD Waiting Period Guidelines After Chapter 13: How Can I Get FHA Loan ApprovalHow Loan Approval After Chapter 13 Discharge

FHA Guidelines on qualifying for an FHA loan after a Chapter 13 Bankruptcy discharged date are manual underwrites if the discharge has not been seasoned for at least two years. HUD, the parent of FHA,  does not require any waiting period after a Chapter 13 Bankruptcy discharge date. If the Chapter 13 Bankruptcy discharge has not been seasoned for two years, then the file needs to be a manual underwrite and manual underwriting guidelines apply.

HUD Waiting Period Guidelines After Chapter 13 and Eligibility For FHA Loan Approval?

Verification Of Rent is required on all manual underwriting and payment shock will be considered a compensating factor. No late payments during and after a Chapter 13 Bankruptcy. Re-established credit after the discharge date is a must. Compensating Factors are required for borrowers with high debt-to-income ratios.

Being Told By A Lender You Do Not Meet HUD Waiting Period Guidelines After Chapter 13 on FHA Loans

If borrowers are told they do not qualify because they do not meet the mandatory waiting period after Chapter 13 Bankruptcy, remember they may not qualify with the lender they consulted with but that does not mean they do not qualify for an FHA loan. There are no waiting period requirements after Chapter 13 Bankruptcy discharge. Please contact us at Gustan Cho Associates at 262-716-8151 or text for a faster response. We do not have any overlays on FHA loans after a Chapter 13 Bankruptcy discharge date. Or email us at [email protected]

Is It Better To Qualify For A FHA Loan Before or After Chapter 13 Discharged?

Is It Better To Apply For FHA Loan After Chapter 13 discharge? Most would say it would be better to qualify for an FHA loan after a Chapter 13 Bankruptcy discharge rather than during a Chapter 13 Repayment Period. However, it is normally better to qualify for an FHA loan during a Chapter 13 Bankruptcy repayment period. The reason is that the payments that you are making to your creditors are considered credit tradelines.

Re-Establishing Credit After Chapter 13 Bankruptcy

Once Chapter 13 Bankruptcy has been discharged, all of those credit tradelines are closed. This holds true unless you have revolving and/or open installment accounts, you will no longer have any more credit tradelines. It will shun you out with many lenders. This is because many lenders will have overlays on credit tradelines. Many lenders will not approve borrowers for an FHA Loan without three credit tradelines that have been seasoned for at least one year. Some require two-year seasoned credit tradelines.

Qualifying For A Mortgage With Lender With No OverlaysHow Qualifying For A Mortgage With A Direct Lender With No Overlays

This is why it is better to apply for an FHA loan while in Chapter 13 Bankruptcy Repayment Period than after a Chapter 13 Bankruptcy discharge. At Gustan Cho Associates., we have no Lender Overlays so it does not matter whether you are applying for an FHA loan while in a Chapter 13 Repayment or After Chapter 13 discharged date. If you have any questions in qualifying for a mortgage during or after a Chapter 13 discharged date and need to qualify for an FHA Loan with a lender with no overlays, please contact Gustan Cho Associates at 1-262-716-8151 for text for a faster response. Or email us at [email protected]

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