+1 vote
asked Feb 4, 2018 in USDA Loans by Matt

2 Answers

0 votes
Hello Matt, and thank you for writing. Whether you can qualify for mainstream financing one year after a Chapter 7 bankruptcy depends on the reason for filing, and if your credit has recovered enough to make you eligible for financing.

Most programs have different rules depending on the cause of your bankruptcy.

Those who sought bankruptcy protection due to extenuating circumstances get shorter waiting periods, sometimes much shorter.

In general, extenuating circumstances are events that result in an unforeseeable, substantial, and lengthy reduction in income or an extreme increase in expenses.

Some examples are a loss of a job or hours due to company downsizing, prolonged strikes, death of a breadwinner, or medical bills not covered by insurance. Applicants must be able to document the cause.

So, what about divorce?

This is a common occurrence, and often a valid reason for bankruptcy, but lenders typically do not consider it an extenuating circumstance for qualification purposes.

Find out if you qualify and get answers in minutes. https://themortgagereports.com/ratequote
answered Feb 5, 2018 by GinaPogol (47,650 points)
0 votes
There is a two year waiting period after CHAPTER 7 BANKRUPTCY to qualify for FHA LOANS.  The 2 year clock starts from the discharged date of the BK.  However, home buyers can qualify for non qm loans after one year after CHAPTER 7 BANKRUPTCY discharged. There is no waiting period after foreclosure and short sale with non qm loans.  However, 20% down payment is required and rates are over 7% on non qm loans.  Non QM LOANS are a great short term loan program until you have passed the mandatory waiting period to qualify for government and conventional loans.  Hope this helps answer your  question.

Gustan Cho NMLS 873293
The Gustan Cho Team at USA MORTGAGE
www.gustancho.com
answered Feb 6, 2018 by GustanCho (106,540 points)

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