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I have BK7 discharged in 11/07. I would like to buy a house sometime toward the middle to end of next year. By then my vehicle will be paid off and I will be debt free. I have one orchard bank CC with $200 limit, balance is never more than about $15. I am wondering about the FHA loan or a USDA direct loan (my income and location would qualify me for the direct program).
Since the credit meltdown have there been any changes to the guidelines for getting a loan from either of these government agencies with the bankruptcy on them? There was no house involved in the BK. Last time I checked it was 2 years post BK for FHA and I am not sure about USDA's guidelines. Are the credit scores needed still about 620? Any info would be great, thanks in advance...
I believe 620 is still the general ballpark for both programs. The USDA application does not specifically mention BK. Question 5 says,
"The applicant's credit report indicates (check one):
a. The applicant has no credit history.
b. The applicant has no adverse credit history.
c. The applicant has experienced adverse credit history, but we have determined that it is beyond the applicant's control.
d. Other (explain)."
My bankruptcy was discharged in August 2007. I applied for and received pre-approval almost exactly two years later, closed on my house last week, 25 months after the discharged. I believe our mid-scores were in the mid to upper 640s at the time. Received a rate of 5.00%, with 3.5% down. I think it looks very favorable for you, assuming things stay on track and your DTI stay within reasonable limits.
Best of luck!
You should be just fine for either of those programs..
Just beware, FHA has been changing guidelines a lot lately since they are now covering 25%+ of all home loans.. Its getting TIGHT with them and might be even tighter in a year.