cancel
Showing results for 
Search instead for 
Did you mean: 

Question regarding the purchase of a home after bankruptcy 7

Highlighted

Question regarding the purchase of a home after bankruptcy 7

We were told we have to wait 2 years after bankruptcy 7 to purchase a home.  Now my question, is it 2 years from the filing date OR 2 years from the discharge date?

 

I filed in Feb 2009 and it was discharged May 2009.  I know it is only a few months, but starting the process in Feb would be better than May.

 

Thanks!

Message 1 of 12
11 REPLIES 11
Highlighted
Frequent Contributor

Re: Question regarding the purchase of a home after bankruptcy 7

It's 2 years from discharge to qualify for an FHA-backed loan. Almost always 4 years for conventional lenders. Also, USDA (which limits you to non-urban areas) and VA (you have to be, of course, an armed services veteran) currently don't have such a post-BK wait requirement.
Message 2 of 12
Highlighted
Contributor

Re: Question regarding the purchase of a home after bankruptcy 7

We filed a chapter 7 as well.  Our LO told us she would only submit the file the day after we reached our 2-years-after-discharge date, as she could not get it approved otherwise.

My Scores:
10/09: EQ 653, TU 656; 8/09 FICO Lender: EQ 652, TU 646, EX 659 10/11: EQ 672, TU 679 EXP Lender 680


Chapter 7 BK Discharged Aug 29, 2007.
Message 3 of 12
Highlighted
Established Member

Re: Question regarding the purchase of a home after bankruptcy 7

If a home is foreclosed as part of a BK7, does that change the timeframe for future mortgages?
Message 4 of 12
Highlighted
Contributor

Re: Question regarding the purchase of a home after bankruptcy 7


@oldhack62 wrote:
It's 2 years from discharge to qualify for an FHA-backed loan. Almost always 4 years for conventional lenders. Also, USDA (which limits you to non-urban areas) and VA (you have to be, of course, an armed services veteran) currently don't have such a post-BK wait requirement.

 

USDA does not have a wait period after BK to apply for a new house?

 

I thought I read somewhere that it was 3 years, but I may well be mistaken...Anybody know for sure?

Message 5 of 12
Highlighted

Re: Question regarding the purchase of a home after bankruptcy 7

Usda is 36 months but if your lender will grant a credit waiver it can be done in under that time. I filed in 11/08 BK 7 and found a lender with no overlays ( additional conditions) who follows the USDA rules to the letter. So they are issuing a credit waiver for the BK 7 for a job loss. It must be for something like a job loss or serious illnes that caused the BK 7 and it had to be out of our control and would not likley happen again (one time thing).  So it can be done on a BK 7 under 2 years. I hope that helps. The problem is finding a lender. We went thru 10 diffrent lenders (talking to them only) and finally found the one that fit our need. I get a great source of information from the online mrotgage broker forums. Its a great source of info to see what the lenders are doing and saying. Good luck !!!
Message 6 of 12
Highlighted
New Member

Re: Question regarding the purchase of a home after bankruptcy 7

I was in the mortgage business for 9 years and up untill a year or a year and a half ago it was 24 mths from the discharge date BUT THINGS HAVE CHANGED DRAMATICALLY and chances are you will not Get a mortgage until the entire economy turns around and banks start lending again.

 

FHA rules are fine BUT it is not FHA lending the money they just insure it, Banks are not lending money to someone with a recent bankruptcy because they won't have an investor to BUY that loan from them regardless of what FHA rules are baNK ARE NOT REQUIRED TO FOLLOW THEM. Even though FHA will insure a loan but NO investor wants to foreclose. They  loose money and then they will put a claim in to FHA but that claim may take a year or more to be processed

For those of you planning on claiming a BK. I wouldn't plan on qualifying for a mortgage for quite some time.

 

 

Edited to remove email address. ~LilMirth

Message Edited by LilMirth on 11-04-2009 06:22 PM
Message 7 of 12
Highlighted
Contributor

Re: Question regarding the purchase of a home after bankruptcy 7

I had no problems at all getting a mortage.  I applied 2 years (exactly) after my discharge date.  Was approved, closed five weeks later.  No issues whatsoever.
My Scores:
10/09: EQ 653, TU 656; 8/09 FICO Lender: EQ 652, TU 646, EX 659 10/11: EQ 672, TU 679 EXP Lender 680


Chapter 7 BK Discharged Aug 29, 2007.
Message 8 of 12
Highlighted
Frequent Contributor

Re: Question regarding the purchase of a home after bankruptcy 7


@credit911 wrote:

@oldhack62 wrote:
It's 2 years from discharge to qualify for an FHA-backed loan. Almost always 4 years for conventional lenders. Also, USDA (which limits you to non-urban areas) and VA (you have to be, of course, an armed services veteran) currently don't have such a post-BK wait requirement.

 

USDA does not have a wait period after BK to apply for a new house?

 

I thought I read somewhere that it was 3 years, but I may well be mistaken...Anybody know for sure?


If only seeking a USDA guarantee, then the borrower also is subject to the lender's rules, and non-USDA lenders are requiring 3 years past BK for a USDA-guaranteed loan. However, if your income allows you to apply USDA 'Direct', and you have a FICO 620+ mid-score, USDA itself only wants a clean year past BK discharge, and sometimes will waive even that.

Message 9 of 12
Highlighted
Contributor

Re: Question regarding the purchase of a home after bankruptcy 7


@oldhack62 wrote:

@credit911 wrote:

@oldhack62 wrote:
It's 2 years from discharge to qualify for an FHA-backed loan. Almost always 4 years for conventional lenders. Also, USDA (which limits you to non-urban areas) and VA (you have to be, of course, an armed services veteran) currently don't have such a post-BK wait requirement.

 

USDA does not have a wait period after BK to apply for a new house?

 

I thought I read somewhere that it was 3 years, but I may well be mistaken...Anybody know for sure?


If only seeking a USDA guarantee, then the borrower also is subject to the lender's rules, and non-USDA lenders are requiring 3 years past BK for a USDA-guaranteed loan. However, if your income allows you to apply USDA 'Direct', and you have a FICO 620+ mid-score, USDA itself only wants a clean year past BK discharge, and sometimes will waive even that.


 

That's good news, I may have to go check in on that. My BK7 is two years old this month. I was looking at a FHA loan middle of next year, but if I can get a USDA direct loan with only 1 year clean history I would do that. My income and area qualify me for the direct loan. 

Message 10 of 12
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.