The time you must wait to buy a house after bankruptcy depends on the type of bankruptcy you filed (Chapter 7 or Chapter 13) and the type of mortgage loan you want.
Typical Waiting Periods After Bankruptcy
Chapter 7 Bankruptcy
- Conventional loan: Usually a 4-year waiting period after discharge.
- FHA or VA loans: Often available after 2 years.
- USDA loans: Typically require 3 years
Chapter 13 Bankruptcy
- FHA, VA, USDA loans: May be available immediately after discharge or even during the repayment plan if you have made timely payments and have court approval.
- Conventional loans: Usually require a 2-year waiting period after discharge
Multiple Bankruptcies
- If you have multiple bankruptcies within the last 7 years, lenders generally require waiting 5 years from the last discharge before applying for a mortgage
Additional Considerations
- The bankruptcy must be discharged by a judge before you can apply for a home loan.
- Improving your credit score and financial situation during the waiting period increases your chances of mortgage approval.
- Some lenders may require higher down payments or charge higher interest rates after bankruptcy.
- It can take up to 5 years or more to qualify for a mortgage with favorable terms, especially conventional loans with typical down payments
- FHA and VA loans tend to have more lenient waiting periods and requirements, making them more accessible sooner after bankruptcy
Summary
Bankruptcy Type| Loan Type| Typical Waiting Period After Discharge
---|---|---
Chapter 7| Conventional| 4 years
Chapter 7| FHA or VA| 2 years
Chapter 7| USDA| 3 years
Chapter 13| Conventional| 2 years
Chapter 13| FHA, VA, USDA| Possibly immediately or after 1 year with court
approval
In general, you can expect to wait at least 2 years after bankruptcy discharge to buy a house, with shorter waits for government-backed loans and longer waits for conventional loans. Improving your credit and finances during this time is essential to getting approved and securing better loan terms
