Bankruptcy, Foreclosure and Short Sales

Below is the timeline you must wait for each loan program if you have had a previous bankruptcy, short sale, or foreclosure:

FHA

FHA loans with the minimum 3.5% down payment or more have the following waiting periods:



Chapter 7 Bankruptcy discharged

2 years from the discharge date. 580 Minimum credit score with some reestablished good credit. Exceptions after one year are possible with conclusive documentation of extenuating circumstances.

Chapter 13 Bankruptcy in repayment

Eligible while the chapter 13 is still in repayment status as long as a minimum of 12 payments have been made and you are able to get approval from your trustee to get a mortgage. Approval must be in writing and it is best to seek that letter after getting the mortgage fully processed. 580 Minimum credit score with some reestablished good credit.

Chapter 13 Bankruptcy paid off

If has been discharged for less than 2 years then debt ratios are restricted and the mortgage is subject to a "manual underwrite" with additional requirements dictated by the strength of each file. 620 minimum credit score with some reestablished good credit.

Foreclosure

3 years from the sale date. Or if you foreclosed on an FHA mortgage, then you will need to wait until it has been 3 years from the time HUD paid the insurance claim for the loss to the lender. This takes anywhere from a month after the sale date up to a year or more. We can check when the claim was paid after you apply. 580 minimum credit score with some reestablished good credit. Exceptions after one year are possible with conclusive documentation of extenuating circumstances.

Short sale

3 years from the sale date. 580 minimum credit score with some reestablished good credit. Exceptions after one year are possible with conclusive documentation of extenuating circumstances.

Short sale

3 years from the sale date. 580 minimum credit score with some reestablished good credit. Exceptions after one year are possible with conclusive documentation of extenuating circumstances.

Conventional


Chapter 7 bankruptcy discharged or dismissed

As long as there is only one bankruptcy per borrower a 4 year waiting period from the discharge or dismissal date is required. If there are more than one bankruptcy filings in the past years a 5 year waiting period is required. Minimum 620 credit score and some reestablished good credit required. As low as 5% down for a purchase and as high as 95% of the appraised value for a refinance.

Chapter 13 discharged

A minimum period of 2 years from the discharge date is required. 620 minimum credit score with some reestablished good credit. As low as 5% down for a purchase and as high as 95% of the appraised value for a refinance. It is not possible to get conventional mortgage while paying on an open chapter 13 bankruptcy. See the FHA loan for an option.

Chapter 13 dismissed

a minimum of 4 years from the dismissal date is required. 620 minimum credit score and some reestablished good credit is required. As low as 5% down for a purchase and as high as 95% of the appraised value for a refinance.

Foreclosure

a 7 year waiting period is required. Minimum 620 credit score and some reestablished good credit.

Short sale

a 4 year waiting period is required for a short sale, pre foreclosure sale, deed-in-lieu. Minimum 620 score and some reestablished good credit. As low as 5% down for a purchase and as high 95% of the appraised value for a refinance. You are now able to get a mortgage after two years if extenuating circumstances and be thoroughly documented. This takes additional time on top of normal loan processing.