Articles Tagged With: Chapter 7 Bankruptcy

July 31, 2023

FHA Loan Applications: How Soon Is Too Soon?

It’s never too early to start planning and saving for an FHA mortgage. But if you have just discharged a bankruptcy or have entered the job market for the first time recently, you may be subject to waiting periods until you have enough time past the bankruptcy or your first job to qualify. There is a two-year rule for some FHA borrowers. These applicants must have at least two years in the job market or two years beyond the discharge date of certain bankruptcy types. And then there are the borrowers who may have met the minimum time-in-the-job-market requirements but have recently changed the nature of their employment. How many years have you worked as your own boss or a contract employee? If it’s under 24 months, you may need | more...

October 25, 2021

Can I Apply For A New Mortgage After Bankruptcy?

By Bruce Reichstein

Is a home loan in the wake of bankruptcy an impossible dream? In many cases, no, it’s not. But a potential borrower looking to start house hunting again after a Chapter 7 or Chapter 13 bankruptcy has been discharged should know about some rules that will apply in such cases. Do you know what they are? Some borrowers, including first-time home buyers, assume that after a Chapter 7 or Chapter 13 bankruptcy filing it is all but impossible to get a participating FHA lender to consider a loan application. It’s a mistake to count yourself out of the running to apply for a new home loan. Some people wrongly assume you must wait seven years or longer to apply for a new mortgage after bankruptcy. FHA home loan rules indicate | more...

FHA Loan Waiting Times After Chapter 13 Bankruptcy

February 5, 2021

Can I Get An FHA Mortgage After Bankruptcy?

By Bruce Reichstein

People can and do apply for home loans, including FHA mortgages, following a bankruptcy filing. What does it take to be approved for an FHA home loan after filing bankruptcy? The key to loan approval in these cases? Time. You can’t simply apply for bankruptcy and six months later try to get a new home loan. FHA loan rules require a minimum time known as a “seasoning period” to be waited out. This seasoning period must pass before you are permitted to apply for a new FHA home loan. How does the seasoning period work? This part is confusing for some. We’ll review the specifics of FHA loan rules for each type of bankruptcy (Chapter 7 and Chapter 13) individually as there are unique rules for each. One consistent feature | more...

December 2, 2019

Home Loans After A Bankruptcy

By Bruce Reichstein

Are you interested in a new home loan but are worried about a past negative credit event such as a bankruptcy? Borrowers sometimes have many questions about FHA mortgages and bankruptcy. One of the most common scenarios asked about include borrowers who are about to be discharged from their bankruptcy and are contemplating a home loan. With low credit scores and a recent bankruptcy, what is a borrower to do in order to become eligible for a home loan once more? In such cases, you need to know the FHA loan rules in HUD 4000.1 which require a minimum waiting time or seasoning period before a borrower can apply for an FHA mortgage once more. The waiting time begins at the time the bankruptcy is discharged. Note that it does | more...

August 16, 2018

FHA Loans And Bankruptcy: Chapter 7

By Joe Wallace

Getting an FHA home loan following a Chapter 7 bankruptcy is not impossible; borrowers who handle their finances and credit responsibly after filing bankruptcy will find FHA home loan rules are more favorable to them than it may seem. Some assume that bankruptcy means never being able to own a home again or that it may take seven to ten years to recover from such a circumstance. FHA loan rules say otherwise, and while additional lender standards may apply the borrower does not necessarily have to wait such a long time to be considered for a new home loan. FHA Loan Requirements For Applying For A Mortgage After Chapter 7 Bankruptcy FHA loan rules in HUD 4000.1 state clearly that a Chapter 7 bankruptcy is not a barrier to a | more...

August 16, 2018

Getting An FHA Mortgage After Bankruptcy

By Bruce Reichstein

Getting an FHA home loan after filing for bankruptcy is not impossible, but it’s very important to understand the rules and requirements of FHA mortgages in this area. Do you know what it takes to be approved for an FHA single family home loan after a Chapter Seven or Chapter 13 bankruptcy? FHA Home Loans Are Possible After Bankruptcy The first thing to understand about getting an FHA home loan following a bankruptcy is that two basic factors will affect your ability to be approved. These are NOT the only factors to consider, but they are the initial requirements; all other issues likely will fall behind these two areas. The first is how much time has passed since your bankruptcy was discharged. FHA home loans require a minimum amount of | more...

January 23, 2018

FHA Loans After Bankruptcy

By Joe Wallace

FHA loans after bankruptcy are possible, and there are many potential FHA loan applicants who are very curious what next steps are following a Chapter 7 or Chapter 13 bankruptcy proceeding in terms of becoming a home owner either again, or for the first time. The most important things to remember about FHA loans after a bankruptcy is that some basic issues will affect your chances for a new home loan above and beyond the rules of your Chapter 7 or Chapter 13. In addition to the guidelines you must follow depending on the type of bankruptcy you filed, FHA loan requirements, lender standards, and your own credit activity following the discharge of your bankruptcy will be crucial in determining your credit worthiness for the new mortgage. Lender standards will | more...

August 23, 2017

Can I Get An FHA Loan After Bankruptcy?

By Joe Wallace

Can I get an FHA loan after bankruptcy? That question is a common one, and the answer depends as much on the borrower as it does on the rules of the FHA single family loan program. In general, those who experience bankruptcy will be required to wait out a “seasoning period” described in HUD 4000.1 (the FHA loan handbook). Depending on what type of bankruptcy you filed, borrowers may also be required to get court permission before attempting to proceed with a new home loan. Mandatory FHA Loan Seasoning Periods Following Bankruptcy Bankruptcy rules may vary depending on the type, but in general a borrower’s minimum waiting period will be 12 months from the time the bankruptcy is discharged. The waiting period does NOT begin from the filing date. FHA | more...

May 19, 2017

An FHA Mortgage Post-Bankruptcy?

By Joe Wallace

Is a mortgage loan possible after bankruptcy? When it comes to FHA home loans the answer is yes, as long as the borrower meets FHA loan standards and sits out a mandatory waiting period (which may vary depending on the bankruptcy, state law, and lender standards). One reader asked a question this week about bankruptcy and FHA loans: “My credit rating is 677 as of 5/18/2017. My income is established by a job that Ive held for over 15 years. My bankruptcy was completed in July of 2011. Can I qualify for an FHA mortgage?” There are many issues at work in situations like these including whether or not the borrower has established a satisfactory pattern of credit activity following the bankruptcy action. The mandatory waiting period (under FHA standards, | more...

May 15, 2017

FHA Loan Rules For Bankruptcy: Chapter 7 and Chapter 13

By Joe Wallace

We’ve had a number of reader questions in our comments section recently asking about scenarios for loan approval that involve bankruptcy and related issues. Can a borrower get a new FHA loan following a bankruptcy? Under what conditions? FHA loan rules in HUD 4000.1 address this issue with separate entries for Chapter 7 and Chapter 13. According to the FHA loan rule book, Chapter 7 requires the lender to observe the following: “A Chapter 7 bankruptcy (liquidation) does not disqualify a Borrower from obtaining an FHA-insured Mortgage if, at the time of case number assignment, at least two years have elapsed since the date of the bankruptcy discharge. During this time, the Borrower must have: – re-established good credit; or – chosen not to incur new credit obligations.” HUD 4000.1 | more...