Mortgage Guidelines During Chapter 13 Bankruptcy

This article is about Mortgage Guidelines During Chapter 13 Bankruptcy

Mortgage Guidelines During Chapter 13 Bankruptcy state borrowers can qualify for home loans during Chapter 13 Bankruptcy repayment plan. Borrowers can qualify for VA and FHA loans during the Chapter 13 Bankruptcy repayment period without the bankruptcy being discharged. They would need the approval of the bankruptcy trustee.

Most trustees will approve a home purchase during the Chapter 13 Bankruptcy repayment plan as long as the petitioner can afford the monthly housing payment. Of course, the home needs to be a regular home and not a mansion. The team at Gustan Cho Associates are experts in helping homebuyers qualify for FHA and VA loans during and/or after Chapter 13 Bankruptcy. Other loan programs do require a mandatory waiting period after the Chapter 13 Bankruptcy discharged date. Not all lenders will do manual underwriting. Gustan Cho Associates are experts on manual underwriting on FHA and VA loans. Over one third of our borrowers are folks either in an active Chapter 13 Bankruptcy repayment plan or had the Chapter 13 Bankruptcy recently discharged. In this article, we will discuss and cover the mortgage guidelines during Chapter 13 Bankruptcy repayment plans on FHA and VA Loans.

FHA And VA Manual Underwriting Guidelines

FHA and VA loans are the only two mortgage loan programs that allow manual underwriting on home mortgages. All FHA and/or VA loans during Chapter 13 Bankruptcy repayment period are manual underwrites. Any FHA and/or VA loans that has been discharged but has not been seasoned for two years are manual underwriting. Manual underwriting guidelines on FHA and VA loans are almost the same. However, lenders are more lenient on VA loans than they are on FHA loans on manual underwriting.

FHA, VA, and Non-QM loans do not have any waiting period after the Chapter 13 Bankruptcy discharged date. Lenders expect borrowers to be timely payments on all their monthly debts after filing bankruptcy. Late payments during and/or after Chapter 13 Bankruptcy may be a deal-killer depending on the lender. One or two late payments due to extenuating circumstances may not always be a deal killer. However, late payments during and/or after bankruptcy discharge due to the disregard of credit will most likely be a deal killer when it comes to qualifying for a mortgage.

FHA And VA Mortgage Guidelines During Chapter 13 Bankruptcy

Mortgage Guidelines During Chapter 13 Bankruptcy on FHA and VA Loans are very similar. Any Chapter 13 Bankruptcy that has not been seasoned for two years after the discharged date needs to be manually underwritten. We will discuss what manual underwriting is in this article. Therefore, any VA and/or FHA loans during the Chapter 13 Bankruptcy payment period need to be manually underwritten. FHA and VA loans are the only two mortgage programs that allow manual underwriting.

Chapter 13 Bankruptcy Guidelines On FHA And VA Loans

Here are the FHA and VA Chapter 13 Bankruptcy Mortgage Guidelines during an active repayment plan:

  • Homebuyers can qualify for a VA and/or FHA loan during Chapter 13 Bankruptcy repayment plan without having the Chapter 13 discharged
  • In order to qualify, the borrower needs to be in the Chapter 13 repayment plan for at least one year
  • 12 months timely payments to the Trustee is required
  • Trustee approval is required
  • Most trustees will sign off on a home mortgage
  • Both VA and FHA loans during an active Chapter 13 bankruptcy needs to be manually underwritten
  • FHA requires a 3.5% down payment
  • VA offers 100% financing.
  • Verification of rent is required on manual underwriting.
  • If the borrower cannot provide verification of rent because they are living with family to save for the down payment, a letter of living rent-free needs to be completed and signed.
  • There is no waiting period after the Chapter 13 Bankruptcy discharged date on FHA and VA loans.
  • Any Chapter 13 Bankruptcy discharge that has not been seasoned for at least two years needs to be manually underwritten.

Gustan Cho Associates Mortgage Group are experts in helping borrowers qualify for FHA and VA loans during and after Chapter 13 Bankruptcy.

Chapter 13 Bankruptcy Guidelines On Conventional Loans

What are the bankruptcy guidelines for FHA and VA 2020 mortgages Chapter 13

Unlike FHA and VA loans, borrowers cannot qualify for conventional loans during the Chapter 13 Bankruptcy repayment period. To qualify for conventional loans after Chapter 13 Bankruptcy, the following mortgage guidelines apply. There is a four-year waiting period after the Chapter 13 Bankruptcy dismissal date. There is a two-year waiting period after the Chapter 13 Bankruptcy discharged date. There is a four-year waiting period after the Chapter 7 Bankruptcy discharged date. The team at Gustan Cho Associates are experts in helping homebuyers and homeowners qualify for a mortgage after bankruptcy. For more information about this article and/or other mortgage-related topics, please contact us at 262-716-8151 or text us for a faster response. Or email us at [email protected]

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