Buying a Home With a Recent Bankruptcy? How long after a bankruptcy can I buy a home again?
Today some lenders are able to take a look at person’s overall credit and financial picture to seek out borrowers who may have had a single issue leading to the filing of a bankruptcy. It is possible to buy a home with a recent bankruptcy discharge (in as little time as 1 week discharge) or even short sale. These particular programs are credit score driven so if a person had good to excellent credit just prior to the bankruptcy, he/she may be able to qualify for a home purchase loan right away. Alternatively, there are additional programs where if a borrower has a down payment (the percentage will vary based upon the credit score), financing is still possible with only an average rating.
FHA guidelines have different seasoning requirements for Chapter 7 and Chapter 13 bankruptcies. In addition, each lender may have their own in-house guidelines on top of the FHA seasoning requirements after a bankruptcy. So for the most part, FHA guidelines require that two years elapse from the discharge of a Chapter 7 bankruptcy before loan eligibility. If a borrower can prove 12 months of consecutive on-time payments, they may be eligible for an FHA loan in only one year with a Chapter 13 bankruptcy. This new loan though may require permission from the Court as the borrower takes on new debt.
In 2014, Fannie Mae changed it’s guidelines from a mandatory 4 years after a bankruptcy to a 2 year waiting period to match the FHA loan guidelines.
Following Suit, VA loan guidelines also require minimum of 2 year seasoning for a Chapter 7 Bankruptcy, and a 1 year seasoning after a Chapter 13.