According to uscourts.gov, 452,990 Americans filed for bankruptcy in 2023, and there were 387,721 filings in 2022.¹

The number one question homeowners and homebuyers have post-bankruptcy is: “Can I get a mortgage after bankruptcy?” The answer is yes! In some cases, a homeowner who has filed for bankruptcy might even be able to obtain a mortgage during the bankruptcy process.

Below, I’ll touch on the available mortgage loans after bankruptcy, the waiting periods that lenders typically have, which home loans allow you to be in bankruptcy proceedings, and how to prepare for a home loan approval when you have a bankruptcy.

Key Topics In This Article: Available Mortgage Programs | Waiting Periods | In Chapter 13 Bankruptcy | Loan Approval

Available Mortgage Loans After Bankruptcy

There are many available mortgage programs after bankruptcy. Here are the most common home loan programs that allow a loan applicant to have a Chapter 7 or Chapter 13 bankruptcy on their credit report.

• Conventional
• FHA
• VA
• USDA

Conventional loans include conforming, jumbo, and bank statement mortgages.

An FHA loan is probably the most flexible program available to homeowners and homebuyers who have previously filed for bankruptcy. Both the VA loan program and the USDA loan program allow loan applicants to have a previous bankruptcy, and I’ll cover the waiting periods for all of these programs below.

After Bankruptcy Waiting Periods

All loan programs available have a waiting period to get a mortgage after bankruptcy. In the section below, I’ll cover the post-bankruptcy waiting period for each of the main loan programs.

Conventional Mortgage

A conventional loan after bankruptcy is possible for those looking for a non-government-backed loan option. There are three main types of conventional loans that you can consider after bankruptcy: conforming, jumbo, and bank statement mortgages.

Each of these loan programs has its own waiting period.

Conforming Loans After Bankruptcy (Waiting Periods)

• Chapter 7: Four-year waiting period (from discharge date)
• Chapter 13: Two-year waiting period (from discharge date)

Source

The conforming loans after bankruptcy waiting periods are shorter for some loan applicants if they have a significant life event that was beyond their control that caused them to file for bankruptcy. An accident or illness that caused massive medical bills and/or the loss of income.

Jumbo Mortgages After Bankruptcy (Waiting Periods)

• Chapter 7: Varies by lender (anticipate at least a four-year waiting period)
• Chapter 13: Varies by lender (anticipate at least a two-year waiting period)

Jumbo mortgages after bankruptcy waiting periods will vary from lender to lender since these loans are not based on guidelines set forth by a government agency. Lenders typically have more than one jumbo loan program, so it’s best to consult your loan officer before applying.

Bank Statement Mortgages After Bankruptcy (Waiting Periods)

• Chapter 7: Varies by lender (anticipate at least a four-year waiting period)
• Chapter 13: Varies by lender (anticipate at least a four-year waiting period)

Bank statement loans after bankruptcy waiting periods will look different with each lender since these loans are not based on guidelines set forth by a government agency. Consult with your loan officer about the exact waiting period for the bank statement loan you are applying for.

A Lot Depends On The Type Of Conventional Mortgage

The waiting period for a mortgage loan after bankruptcy depends on the type of Conventional home loan you choose and whether you filed for Chapter 7 or Chapter 13 bankruptcy.

Conventional mortgages after bankruptcy are a great option for homeowners who want to refinance their current mortgage or purchase a new home.

FHA Mortgage

One of the best ways to get a mortgage in or after bankruptcy is to apply for an FHA mortgage loan.² And yes, you can get an FHA mortgage while in bankruptcy (more on this below).

• Chapter 7: Up to a two-year waiting period (from discharge date)
• Chapter 13: One-day waiting period (from discharge date)

Source

If your Chapter 7 bankruptcy was caused by something beyond your control (i.e., a significant illness that resulted in a job loss, car accident, etc.), then you might be able to obtain an FHA loan well before the two-year waiting period.

There is a one-day waiting period for Chapter 13 bankruptcy.

Using the FHA loan program to obtain a mortgage after bankruptcy is a smart idea. The bankruptcy filing and your lower credit score will not impact your interest rate as much as it will with a Conventional home loan.

The FHA loan program is the most flexible option for people who have filed either a Chapter 7 or Chapter 13 bankruptcy.

VA Mortgage

If you are a veteran and want a loan after bankruptcy, consider the VA loan program. The VA loan bankruptcy waiting periods are standardized across all their loan options.

• Chapter 7: Up to a two-year waiting period (from discharge date)
• Chapter 13: As early as a one-year waiting period (from the filing date)

Source

If you filed for Chapter 7 bankruptcy due to extenuating circumstances, you might be able to get a VA loan approval with less than a two-year waiting period. Extenuating circumstances include a catastrophic event such as an accident or illness that resulted in a job loss and/or significant expenses.

The key thing a veteran should know is that you have options, and your best option for getting a mortgage after bankruptcy might just be the VA loan program.

USDA Mortgage

If you live in rural America and have filed for a Chapter 7 or Chapter 13 bankruptcy, getting a mortgage after bankruptcy might seem impossible since you live in a rural area. It’s not. The USDA loan program can help you get a mortgage after bankruptcy. Here are the waiting periods.

• Chapter 7: Three-year waiting period (from discharge date)
• Chapter 13: One-year waiting period (from discharge date)

Source

USDA loans allow for a shorter bankruptcy waiting period if you can prove the bankruptcy resulted from an event beyond your control.

USDA loans are the ideal mortgage program for people who live in rural America. All USDA home loan applicants must follow the bankruptcy waiting periods if they want to get a new USDA home loan after bankruptcy.

Getting a Mortgage While In Chapter 13 Bankruptcy

Most homeowners currently in a Chapter 13 bankruptcy don’t know that they can refinance their current mortgage into a new, lower-rate FHA mortgage with court approval.³

So, waiting to get a mortgage after bankruptcy is not a requirement, and if mortgage rates are lower than your current rate, you might qualify for a new mortgage while in a Chapter 13 bankruptcy.

How To Prepare For Loan Approval

Follow these four steps to prepare for a loan approval so that you can obtain a loan after bankruptcy.

• Find a highly-rated mortgage company
• Chose an experienced loan officer who has options
• Compile your personal, employment, and financial information
• Gather the necessary loan documentation per your loan officer’s instructions

If you are attempting to obtain a mortgage loan after bankruptcy, you need to find a highly-rated mortgage company with a verifiable reputation. Avoid companies that will say anything to get your business and go with a company with an A or A+ rating with the Better Business Bureau.

From there, you’ll want to find a loan officer with at least five years of experience working with homeowners who have previously filed for bankruptcy. When applying for a mortgage after bankruptcy, you need an experienced loan officer who understands the underwriting requirements for the loan program you are applying for.

With most mortgage companies, you can apply online or over the phone, but you’ll need to compile your personal, employment, and financial information before you do. You’ll need personal information like your social security number, date of birth, where you work, job title, work address, where you bank, and more.

Your experienced loan officer can provide the details of what you’ll need to complete your loan application.

The loan officer can also help you gather the necessary loan documentation by providing a specific list of documents they will need to process your loan application.

Obtaining a mortgage after bankruptcy doesn’t have to be difficult, and if you choose the right mortgage company and an experienced loan officer, your timeline for approval can be a positive one.

Bottom Line On Getting A Mortgage After Bankruptcy

A Chapter 7 or Chapter 13 bankruptcy should not deter you from getting a new mortgage. Knowing the waiting periods for getting a mortgage after bankruptcy will put you in the driver’s seat when it comes to getting a new mortgage.

And don’t just work with any mortgage company. Only work with a mortgage company with a top rating with the Better Business Bureau and a loan officer with at least five years of experience. Getting a mortgage after bankruptcy will be a lot easier with trusted professionals in your corner.

Citation Sources:

1. Bankruptcy Filings Rise 16.8 Percent – uscourts.gov
2. Buying a House While in Chapter 13 Bankruptcy – TheMortgageReports.com
3. FHA Policy Guidelines – Hud.gov