FHA Loans & Bankruptcy

Posted on December 11, 2008
Filed Under Bankruptcy, FHA Home Loans | 1 Comment

Will FHA allow me to purchase a home while in Bankruptcy?

Yes, but certain conditions have to be met.  We have outlined the conditions in detail about FHA guidelines for obtaining an home with a recent or current bankruptcy. The long and short of it is that you will need to establish financial responsibility and depending on what type of bankruptcy certain time frames need to happen.  For instance a Chapter 7 would require 2 years since the bankruptcy discharge and re-established credit or choice to not incur any more debt. It will also require the lender to document that the situation that led to bankruptcy no longer exists.  If the bankruptcy discharge has been more than 12 months but less than 24 months than the borrower would need to show extenuating circumstances.    Not being able to sell a home due to a job transfer or relocation would not qualify.

A Chapter 13 bankruptcy would require that 12 months of payout has occured and that the payments have been made on time and also the court would have to give permission to enter into a mortgage transaction.


Comments

One Response to “FHA Loans & Bankruptcy”

  1. FHA Underwriting Guidelines | Vancouver Washington Real Estate Information on December 11th, 2008 10:19 pm

    […] I purchase a home if I’ve had a bankruptcy or am currently in Chapter 13? Chapter 7:  2 years must have elapsed, re-established credit and or […]

Leave a Reply

You must be logged in to post a comment.