Congratulations my fellow Vet!
Perseverance, dedication, and tenacity are some good words to describe you. I've been a Loan Officer for over 30 years and can't tell you how few people out there, know what you learned through this process. Great job! BTW, if you allow the LO to repull your credit after the 24th month mark after your discharge, most likely you will get an AUS Approve/Eligible, and won't have to be downgraded to a manual. Most lenders like my company, have reduced conditions and better pricing and lower rates with an AUS approval. Just a thought.
For those good folks who may stumble on this thread later on, hopefully this member's story will inspire you. If you filed a Bankruptcy either Chapter 13 or Chapter 7, you can become a homeowner!
After a BK Chapter 7 depending on the loan program, the waiting can very. Here is a quick rundown.
- NonQM / Portfolio – 1 day after BK, Short Sale, Foreclosure. These loans are 100% credit score driven. They do have higher rates and fees and down payment requirements. These programs can be viable way to enter the housing market as long as you have an exit strategy. Due to the CORVID-19 pandemic, many of these programs have been temporarily suspended, but there are still some available.
- VA – 2 years unless you had an extenuating circumstance like a death in the immediate family or a serious illness, then the waiting period is reduced to 1 year. Under the extenuating circumstances waiver, you will need to provide appropriate documentation to support your hardship.
- FHA – 2 years unless you had an extenuating circumstance like a death in the immediate family or a serious illness, then the waiting period is reduced to 1 year. Under the extenuating circumstances waiver, you will need to provide appropriate documentation to support your hardship.
- USDA Rural Development Loan – 3 years, unless you had an extenuating circumstance like a death in the immediate family or a serious illness, then the waiting period is reduced to 1 year.
- Conventional – 4 years, unless you had an extenuating circumstance like a death in the immediate family or a serious illness, then the waiting period is reduced to 2 years
After filing a BK Chapter 13, all government loan programs like FHA, VA and USDA allow for borrowers to finance a home while in an active Bankruptcy Chapter 13 as long as you have made 12 on time payments to the Trustee. Conventional will require 2 years waiting period after your discharge or 4 years after a dismissal. For government loans, you will need to get pre-approved by an experienced Loan Officer who will issue you a Pre-Approval Letter, Loan Application and Fee Sheet. You will then forward that information to your Attorney who will request a motion to incur debt. In most cases, the court will approve your request. The process can take days or a month depending on the court.
NOTE: In the members case, their Chapter 13 was converted to a Chapter 7, so the wait time is 2 years from the Discharge. I hope this help!
Best wishes to all!
Branch Manager - Specializing in FHA, VA, USDA, Conventional, Jumbo, Portfolio and Non-QM Loan Products.
