USDA RD Guarantee after Bankruptcy Question

[ji9]

We would like to try and purchase a home using the USDA Rural Development Guarntee program some time in the next year or so.   We filed a Chapter 13 bankruptcy back in January of 2009 which was then converted to a Chapter 7 this past summer and dischaged 09/2011.  The credit criteria I find online for this loan say's a recent discharged bankruptcy is OK if you have a credit score over 620 which we do.  One lender I spoke to said no, it had to be 2 years since discharge but also said that was her companies rules and maybe not Rural Developments rules.  Looking for clarity and also a recommendation for a USDA RD lender.  We are in New Hampshire.  Thank you.

[Anonymous]

Even though you may meet the USDA requirements you still have to meet the banks first as they will have to ok the loan before it is sent to the USDA.  If you qualify for a direct loan then I believe it only goes through USDA which might give you a better chance.  I don't think you will find a bank willing to give you a loan with such a recent bankruptcy.

[ShanetheMortgageMan]

While USDA doesn't have anything in writing, generally for USDA financing it's 3-years from a discharged Ch 7 BK.  They indicate that with a BK discharge less than 3 years ago lenders need to provide justification for approving the loan, the lender also needs to be able to sell the loan on the secondary market - if both of those items can't happen then the lender won't make the loan.