Home Purchase With Prior Bankruptcy And Foreclosure

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This BLOG On Home Purchase With Prior Bankruptcy And Foreclosure Was UPDATED On June 7th, 2019

How To Qualify For Home Purchase With Prior Bankruptcy And Foreclosure:

For those folks who want to purchase a new home with an FHA Loan, but had filed a prior bankruptcy, there is a mandatory waiting period of 2 years from the discharge date of the bankruptcy.

For those who have had a foreclosure, there is a mandatory waiting period of three years from the date of the sheriff’s sale or the date their name was transferred out of the deed of the home to qualify for FHA Loans
For those who have had a short sale, they can qualify for a conventional mortgage loan after 4 years if they can put 5% down payment
For those who have had a deed in lieu of foreclosure, they can qualify for conventional loans in four years if they can put 5% down payment
Putting an offer on a home before foreclosure or bankruptcy waiting period is over can be risky

In this blog, we will discuss mortgage guidelines on Home Purchase With Prior Bankruptcy And Foreclosure.

Table of Contents Click Here

Purchase Contract On Home Purchase With Prior Bankruptcy And Foreclosure

Putting an offer on a home before foreclosure or bankruptcy waiting period is over is very common but I would strongly advise against it.

Many people who have had a prior bankruptcy and/or foreclosure often reestablish themselves quickly and are ready to purchase a home
However, there are federal mandatory guidelines and restrictions on when they can apply for a mortgage loan
Two years after a bankruptcy and three years after a foreclosure with FHA Loans
There is a three-year waiting period after Chapter 7 Bankruptcy, foreclosure, deed in lieu of foreclosure, short sale to qualify for USDA Loans
There is a two-year waiting period after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale to qualify for VA Loans
Borrowers in Chapter 13 Bankruptcy can qualify for FHA and VA Loans one year into their repayment plan with manual underwriting and Trustee Approval
Chapter 13 Bankruptcy does not have to be discharged
There is no waiting period to qualify for FHA Loans after Chapter 13 Bankruptcy discharge date
Any Chapter 13 Bankruptcy discharge that has been seasoned for two years or less needs to be a manual underwrite
There is a four-year waiting period to qualify for conventional loans after a short sale and/or deed in lieu of foreclosure
There is a seven-year waiting period to qualify for conventional loans after a foreclosure

No Waiting Period Requirements After Bankruptcy And Housing Event With Non-QM Mortgage Loans

Non-QM Loans does not have a waiting period after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale.

However, 10% to 20% down payment is required on Non-QM Loans
The down payment requirement depends on the borrower’s credit scores and the longevity on the bankruptcy and/or housing event seasoning
There is no private mortgage insurance on Non-QM Loans
There are no maximum loan limits on Non-QM Mortgages

Gustan Cho Associates are experts in the origination and funding of Non-QM Mortgages. We also offer 12-month bank statement mortgage loans for self-employed borrowers with no income tax returns required.