Mortgage Waiting Periods After a Bankruptcy, Foreclosure, or Short Sale
How long do you have to wait before you can get a new mortgage? Mortgage waiting periods depend on what type of loan you want to use for your next home. The good news is, you may only need to wait as little as 2 years!
To that end, here’s a breakdown of the waiting periods, based on the event.
Mortgage Waiting Periods After Bankruptcy
The length of the mortgage waiting periods depend on the type of bankruptcy you filed. In addition, the waiting period depends on the type of loan you want to take out.
Chapter 7 or Chapter 11 Bankruptcy
If you have filed a Chapter 7 or 11 Bankruptcy, the mortgage waiting periods begin after the discharge date:
- Fannie Mae (conventional) loan – 4 years from discharge date
- FHA loan – 2 years from discharge date
- VA loan – 2 years from discharge date
- USDA loan – 3 years from discharge date
Chapter 13 Bankruptcy
On the other hand, if you have filed a Chapter 13 Bankruptcy, the mortgage waiting periods are shorter:
- Fannie Mae (conventional) loan – 2 years from discharge date, and also 4 years from the dismissal date.
- FHA loan – 1 year from the payout period. However, you also need court permission, and proof of satisfactory bankruptcy payment and performance.
- VA loan – 1 year from the payout period. Also, court permission, and proof of satisfactory bankruptcy payment and performance.
- USDA loan – 1 year of the payout must elapse and payment performance must be satisfactory. In addition, you need court permission to borrow again.
After a Foreclosure
- Fannie Mae (conventional) loan – 7 years from completion date. If a foreclosure was included in the bankruptcy, the wait time then follows the bankruptcy discharge date.
- FHA loan – 3 years from completion date
- VA loan – 2 years from completion date
- USDA loan – 3 years from completion date
After Short Sale/Deed-in-Lieu of Foreclosure
The mortgage waiting periods after a short sale begin after the completion date:
- Fannie Mae (conventional) loan – 4 years
- FHA loan – 3 years
- VA loan – 2 years
- USDA loan – 3 years
For More Information
Contact me if you have any questions about buying a home after a bankruptcy, foreclosure, or short sale. Most importantly, you may be surprised by what you can qualify to do!
In addition to timeline questions, are you curious about the home buying process? Check out my other articles. For example, you can read about estimating your mortgage qualification, and choosing a lender. After that, you can review a sample escrow timeline when buying a home.
Finally, are you still wondering what type of loan is best? You can also read about conventional, FHA, and VA loan programs.
To learn more: take advantage of a no-cost online home buyer workshop. This new tutorial is a comprehensive homeownership education course. CreditSmart® Homebuyer U offers six modules to promote education, homebuyer preparedness, and financial management.
I couldn’t have written this article without the expert advice of Nick Richardson:
Nick Richardson is a mortgage banker with EZ Fundings in San Diego, California, NMLS #966361. He can help you finance or refinance properties located in California. Nick can answer all of your questions about mortgage programs, with no hassle, no obligation. Contact him at 760-402-6962 or e-mail nick@ezfundings.com.
