borrowing after bankruptcy
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How Long Before I Can Borrow Again?

May 2, 2017
borrowing after bankruptcy

Have you recently had a bankruptcy, foreclosure, deed-in-lieu or short sale?  You may have to wait some time before being able to borrow again.   But how long do I have to wait before I can qualify for another loan?  Thanks to Lauri Bembaron at LoanDepot you can use this handy table to determine your wait time.

Event

FHA

VA

USDA

Freddie Mae

DU Approval/Eligible Findings Required

Freddie Mac

LP Accept Recommendation Required

Bankruptcy

Chapter 7:

2 Years, Min 12 months with extenuating circumstances

Chapter 13:

Min 12 months with satisfactory payment history & court approval

Chapter 7:

2 Years, Min 12 months with extenuating circumstances

Chapter 13:

Min 12 months with satisfactory payment history & court approval

Chapter 7:

Over 3 Years, Over 12 months with extenuating circumstances

Chapter 13:

Min 12 months with satisfactory payment history & court approval

Chapter 7 or 11:

4 Years

Chapter 13:

2 years from discharge date or 4 years from dismissal date

More than one BK within the past 7 years:

5 years from the most recent dismissal of discharge date.

Chapter 7 or 11:

4 Years

Chapter 13:

2 years from discharge date or 4 years from dismissal date

More than one BK within the past 7 years:

5 years from the most recent dismissal of discharge date.

Foreclosure

3 Years

Min 12 months with extenuating circumstances

2Years

Min 12 months with extenuating circumstances

3 Years

Over 12 months with extenuating circumstances

7 Years

3 years with restrictions & with extenuating circumstances

Foreclosure in BK:

apply BK wait period if the documentation verifies mortgage discharged in the BK

7 Years

Short Sale (also known as pre-foreclosure sale)

3 Years

No Wait Period if:

borrower paid mortgage & installment debt on time for 12 months prior to short sale

Or Extenuating Circumstances:

Min 12 months

No wait period with DU Approval Eligible findings using the credit report reflecting the short sale mortgage tradeline.

Or if Manual Underwrite:

Min 12 months

3 Years

No Wait Period if:

borrower paid mortgage & installment debt on time for 12 months prior to short sale & did not take advantage of declining market conditions & purchased , at a reduced price, a similar or superior property within a reasonable commuting distance.

4 Years

2 years with extenuating circumstances

No wait period with (LP Accept) findings

Deed-in-Lieu of Foreclosure

3 Years

Min 12 months with extenuating circumstances

2 Years

Min 12 months with extenuating circumstances

3 Years

Min 12 months with extenuating circumstances

4 Years

2 years with extenuating circumstances

4 Years

with restrictions per LP; if LP reads as foreclosure, 7 year wait period applies.

Loan Modification on other real estate Holding

(non-subject property)

Satisfactory 12 month mortgage rating for modified loan

Satisfactory 12 month mortgage rating for modified loan

Satisfactory 12 month mortgage rating for modified loan

No Wait Period

No Wait Period

 

Author

YardSignal.

info@yardsignal.com

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