Mortgage Waiting Periods
Every major mortgage program has a specific waiting period after bankruptcy. The clock starts from the discharge date (for Chapter 7) or the dismissal date (if dismissed).
| Loan Type | After Ch.7 Discharge | After Ch.13 | Notes |
|---|---|---|---|
| FHA | 2 years | 1 year into plan (with trustee approval) | Most accessible; 3.5% down |
| VA | 2 years | 1 year into plan | 0% down for eligible veterans |
| USDA | 3 years | 1 year into plan | 0% down; rural/suburban areas |
| Conventional | 4 years | 2 years after discharge | Requires stronger credit score |
| Jumbo | 7+ years | Varies by lender | Strictest requirements |
FHA Loans -- The Most Common Path
FHA loans are by far the most popular choice for homebuyers after bankruptcy. Key requirements:
- Waiting period: 2 years from Chapter 7 discharge date; or 1 year into an active Chapter 13 plan with court/trustee approval and demonstrated on-time plan payments
- Credit score: Minimum 580 for 3.5% down payment; 500-579 requires 10% down
- Clean credit since bankruptcy: No late payments, new collections, or derogatory marks
- Stable employment: Typically 2 years of employment history
Extenuating circumstances exception: FHA may allow a shorter waiting period (as little as 1 year after Chapter 7) if you can document extenuating circumstances -- a one-time event beyond your control (like a medical emergency or job loss due to employer closing) that caused the bankruptcy.
Preparing While You Wait
- Open a secured credit card and build payment history
- Save for a down payment (FHA requires only 3.5%)
- Avoid any new derogatory credit marks
- Maintain stable employment
- Keep debt-to-income ratio low
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Related Resources
Credit Rebuilding -- Step-by-step credit recovery after bankruptcy
First Year -- What to expect in year one
dischargeinjunction.com -- Your rights under the discharge injunction