bk4Sometimes life gets in the way and, of course, it’s never fair.  A change with a clean slate can be a positive experience, a chance to start over, admit mistakes and move on.  Now you are ready to settle down with a “home”, a place to call your own and a place where you can “live”.

So just what are the rules when you are trying to buy a home (or refinance) if you’ve had a bankruptcy?  Below is a summary of Waiting Period requirements for FHA/VA and Conventional loan programs…

FHA or VA

Derogatory Event      Waiting Period Requirements

Bankruptcy — Chapter 7

• 2 years from discharge date

Bankruptcy — Chapter 13

• one year of the pay-out period under the bankruptcy has elapsed
• the borrower’s payment performance has been satisfactory and all required payments have been made on time, and
• the borrower has received written permission from bankruptcy court to enter into the mortgage transaction.

Consumer Credit Counseling Pmt Plans

• one year of the pay-out period has elapsed under the plan
•  the borrower’s payment performance has been satisfactory and all required payments have been made on time, and
• the borrower has received written permission from the counseling agency to enter into the mortgage transaction.

 

Conventional

Derogatory Event      Waiting Period Requirements Waiting Period with Extenuating Circumstances*
Bankruptcy — Chapter 7 or 11 • 4 years • 2 years
Bankruptcy — Chapter 13 • 2 years from discharge date • 2 years from discharge date
• 4 years from dismissal date • 2 years from dismissal date
Multiple Bankruptcy Filings • 5 years if more than one filing within the past 7 years • 3 years from the most recent discharge or dismissal date

*Alert – Extenuating circumstances are rarely, if ever, allowed or approved by the underwriter.

 Judgments or Tax Liens (as listed on the Credit Report)bankruptcy-1

·         Must provide PAID IN FULL with supporting documentation or PAID receipts prior to closing.  Waiting period is not required.

 

Remember, all borrowers must have re-established credit and meet minimum credit score requirements.

*Your situation may be different.  Please consult a professional for your specific qualifications.

 

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