Bankruptcy: How Long Until I Can Get A Mortgage Again?

Qualifying for a Mortgage After a Bankruptcy

How soon can you get approved for a mortgage after a Bankruptcy?

Sometimes life throws a curveball and bankruptcies happen. You can qualify for a mortgage to buy a house or refinance your current mortgage after a bankruptcy.  How soon this can happen depends on the type of mortgage program and the type of bankruptcy that you filed.  Below are the basic bankruptcy rules for each of the major mortgage programs.  Exceptions are possible but are not easy to obtain.  I have generally only witnessed exceptions when there is an instance of documented loss of income due to health or the death of a wage earner. 

 It is important to establish positive credit again after a bankruptcy, to read about establishing credit again after a bankruptcy click here.

 Let’s review the rules for obtaining a mortgage after a bankruptcy for the major mortgage programs…

CONVENTIONAL MORTGAGE AFTER A BANKRUPTCY

CHAPTER 7: General Rule: 4 years from discharge date

 Exception: 2 years from discharge date with extenuating circumstances

CHAPTER 13:   General Rule: 4 years from dismissal date  if CH13 not completed;  2 years from discharge date if completed

Multiple Bankruptcies: 5 years from the most recent discharge date

FHA MORTGAGE AFTER A BANKRUPTCY

CHAPTER 7: General Rule: 2 years from discharge or dismissal date with re-established credit

Exception: 1 year from discharge may be possible if the borrower documents extenuating circumstances beyond his or her control and has had a clean payment history on everything for the last year.

CHAPTER 13: This type of bankruptcy does not prevent from qualifying for an FHA as long as 12 months of clean payments towards the bankruptcy plan and the applicant has the approval of the court to obtain a new mortgage.

VA MORTGAGE AFTER A BANKRUPTCY

CHAPTER 7: General Rule: 2 years from discharge or dismissal date with re-established credit

 Exception: 1 year from discharge or dismissal date with extenuating circumstance with re-established credit

CHAPTER 13:  General Rule: A minimum of 12 months of satisfactory payments have been made and the veteran ahs the approval of the court to obtain a new mortgage.

USDA MORTGAGE AFTER A BANKRUPTCY  

CHAPTER 7:   General Rule: 3 years from discharge or dismissal date with re-established credit

CHAPTER 13: General Rule: 1 year from discharge date