FHA Loan after Chapter 13

[Anonymous]

I filed Ch. 13 in 2005 and I was discharged in October of 2008.  When will I be able to get a first time home buyer FHA Loan?  (There wasn't a home involved in the BK).  I'm being told 3 years by a friend that is an LO.  However, everywhere I can find online shows 2 years, including the FHA website itself.  Will this vary from lender to lender?  Does anyone have any recommendations on who I should talk to when my 2 years has passed?

[Anonymous]

Hi Bosrich,

Congrats on getting through your CH 13 successfully!

We thought we'd have to go FHA after CH 13 discharge.  We were surprised to be approved for conventional (refi) six months after discharge.

Make some phone calls and find a mortgage lender that works with both conventional and FHA - they will be able to help you determine which will suit you better and what the appropriate timelines are.

And, of course, pull your reports and scores so you know where you stand.

[Anonymous]

In fact, FHA requires NO waiting period following Chapter 13 -- the 2-year proviso applies to Chapter 7 filers -- and might, with trustee permission, guarantee loans to filers with more than a year in a bankruptcy plan:

http://www.fha.com/credit_issues.cfm

I closed a little over a year ago, for example, an FHA mortgage 55 days after discharge.

Most conventional lenders DO, indeed, require a 3-year wait, and regardless of which loan program ones uses, the borrower, of course, must meet the applicable credit standards.

It's very important for a post-bankruptcy applicant to find and use a mortgage broker or loan officer experienced in servicing such applicants. Many, even in the banking and housing industries, don't know the rules for BK filers, and many filers don't know where to look for lenders amenable to loaning to post-BK borrowers.

[Anonymous]

Most conventional lenders DO, indeed, require a 3-year wait, and regardless of which loan program ones uses, the borrow, of course, must meet the applicable credit standards.

---

That must be 3 years post filing, not discharge.  Because Ch 13's require a 3-5 year payment plan, once discharged you should be able to find lenders that will take you on.  Our mortgage broker didn't specialize in post-BK, and we were approved through the computer system without a manual review.  Our broker was pretty dang surprised.  So were we!

OP, how are you doing with meeting those applicable standards i.e. FICO scores?

IME, I would stay away from brokers that advertise that they specialize in post-BK.  But your experience may be very different.

[Anonymous]

My eligibility is ok.  I definitely meet any income requirements.  My wife's scores are low 700's and my Experian and Equifax are in the 690's.  My TU is in the low 600's because my Sallie Mae loan keeps showing up as a new derogatory every 30 days for some reason.  I can't seem to get someone to work with me on that one.  My only credit since discharge is a car loan, a secured card, and my Sallie Mae student loan that has started up with payments again.  I'm hoping to start looking for a mortgage this time next year when I'll have time to get into the 700's and get my annual bonus for a downpayment.  On a side note, I work for a financial services company that is a big lender.  I'm hoping they will be willing to work with me.   Thanks for the help, any other advice you have would be much appreciated.

[rwhite59]

We were discharged from BK13 on September 8, 2009. We closed on our house using a 100% financing (VA loan) on September 14, 2009. We were actually approved before we were discharged. Once discharged as soon as we received the discharge papers we proceeded with the closing.

[Anonymous]

Currently shopping for FHA loans in last month of Chapter 13. Most banks are looking for a mid FICO of at least 620. With 700's, you should be fine. Many loan officers do not understand the difference between Ch. 13 and Ch. 7, or even FHA guidelines. Find a knowledgeable mortgage broker, and good luck.

[sgtm7]

It must depend on the lender. My Chapter 13 was discharged in May 2009.   I sent WellsFargo $45,000 and paid off my home in May 2010.  In June I applied to get a preapproval to get another home, with VA as the guarantee.  You would think having just paid off my home with them would make it pretty easy right?  WRONG.  I was denied due to my bankruptcy.  I was told I had to wait 2 years post discharge.  I didn't feel like arguing, and I decided I would just wait until next year.   I won't being going with WellsFargo though.  They were reporting my account incorrectly, and it said that they were included in the bankruptcy, although they were paid outside the plan. 

[Anonymous]

http://www.fha.com/credit_issues.cfm Again, as noted earlier, FHA itself requires NO other waiting period after you've reliably been in a Chapter 13 plan for one year. Please read the above link to the FHA website itself. Also -- again, as noted earlier -- lenders very well may have more stringent requirements than FHA. In other words, although FHA doesn't require a prescribed waiting period Wells Fargo, for example, might. A borrower must meet the most stringent standard presented. That said, there are some lenders who WILL loan to filers immediately post-discharge -- or even, with trustee permission, while the borrower is still paying his/her Chapter 13 plan -- if lending standards otherwise are met. It's not easy, however, which is why the knowledge of a mortgage broker or loan officer experienced in dealing with BKs is crucial.

[krielly]

sounds like a VA issue then.....not FHA, which is what the OP was talking about obtaining.

We just did a cash out re-fi on our FHA mortgage with Wells Fargo and just received our discharge 4/9/10.

FHA requirements don't require that you are discharged for a 13, however.......it is possible to obtain a FHA mortgage DURING your 13 (meeting all sets of criteria).

K