In order to qualify for an FHA, VA, or conventional mortgage following a bankruptcy filing, short sale, or foreclosure, the borrower must adhere to distinct waiting periods. Understand that these guidelines are subject to change based on current FHA, VA, and conventional financing parameters. Inquire with a mortgage lender if these deadlines have changed. With the exception of extenuating circumstances, the FHA requires two years from the date of discharge or dismissal following a Chapter 7 bankruptcy. VA requires two years from the date of discharge or dismissal. Conventional Financing necessitates four years from the date of discharge or dismissal.
Chapter 13 bankruptcy: The FHA requires one year of on-time Chapter 13 payments. VA requires one year of timely Chapter 13 payments. Conventional financing requires two years from the discharge date of Chapter 13 or four years from the date of dismissal.
FHA requires three years from the date of foreclosure completion. VA mandates two years from the date the foreclosure was finalized. Conventional financing requires seven years after the foreclosure's conclusion.
FHA requires one year from the date of a short sale if there were no late payments. FHA mandates three years from the date of a short sale for any delinquent payments. VA requires two years from the date of the short sale. Conventional financing stipulates 2 years for a maximum LTV of 80% and 4 years for a maximum LTV of 90%.
Although bankruptcy has a negative impact on your credit score, you can quickly get your finances in order and purchase a residence. It is also fascinating to observe how FHA, VA, and Conventional Financing treat Chapter 7, Chapter 13, short sales, and foreclosures differently. Instead of allowing the house to go into foreclosure, it appears judicious to file for bankruptcy and conduct a short sale at the same time, given the current lending criteria. For example, Conventional Financing requires a short sale to wait two years to obtain an 80% LTV, while a foreclosure requires seven years.
Contact an experienced bankruptcy attorney in your state to discuss your case, as no two cases are identical. This article is for informational purposes only and is not intended to provide legal advice.""
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