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How soon can you qualify for a mortgage after a Chapter 7 Bankruptcy?

March 17th, 2017 by usdaadmin

What are the bankruptcy waiting periods for USDA, FHA, VA, and Conventional?

With USDA, FHA, VA, or Conventional loan programs, Chapter 7 Bankruptcy waiting periods are different and in today’s video I will explain how soon you can qualify for a mortgage after a Chapter 7 Bankruptcy and compare the programs side by side.

Remember, if you need help or a have question that is what we are here for, so just call or email to discuss your scenario because we are known for returning calls, replying to emails, and responding to your messages. Now, wouldn’t it be nice if everyone did that!

How soon can you qualify for a mortgage after a Chapter 7 Bankruptcy?

In many cases a Chapter 7 bankruptcy does not occur due to financial mismanagement, but instead due to third party events and circumstances that are outside of the homeowner’s control.

How soon can you qualify for a mortgage after a Chapter 7 Bankruptcy in Florida

With that being said, once a Chapter 7 Bankruptcy has been discharged, waiting periods will apply which will determine how quickly you can qualify for a mortgage.

Currently, here are the published Chapter 7 Bankruptcy standard qualifying guidelines for USDA, FHA, VA, and conventional:

VA Loans
VA Loans are the most lenient and allow for 2 years after bankruptcy discharge;

USDA Loans
While USDA Loans require 3 years after bankruptcy discharge, exceptions can be possible which my office has successfully processed and closed;

Conventional Loans
Conventional Loans under Fannie Mae and Freddie Mac have a 4 year waiting period for mortgage qualifying after bankruptcy discharge; and

FHA Loans
While FHA Loans have a 2 year waiting period after bankruptcy discharge, be extremely cautious when a mortgage was included in the bankruptcy.

If there was a mortgage discharged through bankruptcy, it is important to find out when the deed to the property actually transferred out of your name, because while FHA guidelines only have a two year waiting period after a Chapter 7 Bankruptcy discharge, FHA will then restart their three year foreclosure waiting period from the date the deed officially transfers out of the homeowner’s name!

How soon can you qualify for a mortgage after a Chapter 7 Bankruptcy in Florida

Thankfully, USDA, VA, and Fannie Mae guidelines are more lenient when a mortgage was included with a Chapter 7 Bankruptcy and do not restart the foreclosure waiting period based on the deed transfer date.

My office has been able to successfully process USDA loan exceptions after a Chapter 7 Bankruptcy depending on the factors involved.

However, remember that any exceptions would be looked at on a case by case scenario based on the facts and circumstances of that individual situation.

If you are trying to qualify for a mortgage and have recently been denied because of a previous Chapter 7 Bankruptcy, please take advantage of our free Second Opinion Service (SOS) which is great for both new pre-qualifications and existing transactions.

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