Financing in North Bethesda>Question Details

Rob H, Home Owner in Bethesda, MD

New FHA Loan - After Chapter 13 Discharge...

Asked by Rob H, Bethesda, MD Sat Aug 25, 2012

I understand the FHA rules require two years (post-discharge) for a Chapter 7 filer to apply for a loan. However, for a Chapter 13 filer one year of on-time payments is required and the court's permission to enter a new loan. So once a Chapter 13 filer has received a discharge (typically 3-5 years after filing) there should be no waiting period. Chapter 7 and Chapter 13 rules are obviously very different and cannot be unilaterally applied to each other, so this seems very ambiguous. Can someone please clarify that no waiting period would apply to a Chapter 13 filer with a discharge?

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Typically you will have to wait at least two years but some lenders offer flexible loan program. Check if you qualify for a mortgage. Try http
2 votes Thank Flag Link Sat Aug 17, 2013
When a home is included in bankruptcy it is considered the same severity as a foreclosure, and with FHA financing, it is 3 years from the foreclosure sale date (which is not always the same as the bankruptcy discharge date). Some lenders, on case by case basis', will go by the bankruptcy discharge date, but majority will go by the foreclosure sale date. If the bankruptcy and subsequent foreclosure was due to extenuating circumstances (such as medical) then with at least 12 months of re-established credit FHA programs can find it acceptable.

Web References:
1 vote Thank Flag Link Wed Jul 22, 2015
You are correct, I just closed on my FHA home loan and my BK chapter 13 is less than 1 year discharged. I was told by 4 mortgage companies that this could not be done.The mortgage process is the same except it has to be a manual underwriting process which most mortgage companies do not want to do. I live in North Carolina and Ronnie at InterContinental Capital Group in New York had no issues getting the loan approved and done just 2 weeks ago. Dont believe them if they say it cannot be done. Because it can. Call Ronnie at 917-340-4036 or email him at and he can help you.
0 votes Thank Flag Link Tue Dec 22, 2015
Keep up the good work Robert. I will rely upon Brent's wealth of knowledge as to when the time is right.

Good luck
0 votes Thank Flag Link Mon Aug 27, 2012

The waiting period for FHA is 2 years from discharge for a Chapter 13 that was successfully completed. A waiting period of less than two years may be allowed on a manually underwritten loan under the criteria noted (one year lapsed, successful payment history, written permission).

Not all lenders allow manual underwriting of FHA loans. Most use the FHA total scorecard, which will require a 2 year waiting period from discharge.

Hope this was helpful and please let me know if you have any questions.

PS i like the last sentence you wrote. Better than average chance but not a slam dunk loan. Underwriters can do some funny things if all the pieces don't look good together.

Brent Mendelson
Senior Loan Officer
1ST Mariner Mortgage
Lending in all 50 states
0 votes Thank Flag Link Mon Aug 27, 2012
I am somewhat in the same predicament as Robert. It's not impossible to get an FHA mortgage, the guidelines state "If the Chapter 13 bankruptcy "has not" been discharged for a minimum period of two years, the loan must be downgraded to a Refer and evaluated by a Direct Endorsement (DE) underwriter."
Flag Fri Aug 16, 2013
Hello Jessica, Tony and Akil ~ Thank you for your responses!

Here is more background. I will complete my Chapter 13 next month (September) with a discharge expected shortly thereafter. My annual income is $74,800 and I have almost 15 years of federal service.

I have maintained my auto loan ($350.00 per month) on time, and the loan will be paid off in six months. I will have no other debt, however, I intend to open a secured credit card shortly after discharge.

Finally, my credit score is currently 613, and I do have some other positive tradelines on my credit report still being reported that were pre-bankruptcy.

So based on your responses, I gather the odds are better than average I could qualify for a FHA mortgage in the near future.
0 votes Thank Flag Link Sat Aug 25, 2012
Hi Robert,

It will depend upon your re-established credit. Best to confer with a loan officer. if you need a reference for a loan officer or credit repair specialist let me know.
0 votes Thank Flag Link Sat Aug 25, 2012
Just spoke with a lender that has done many loans for buyer clients of mine, Jeff Halbert with First Home Mtg ,as was previous stated , credit history will be important, but generally if your discharged from the ch 13 and have established good history you are good to go, also, 2 years after filing with good history you should be fine as well.

Please feel free to access my website
0 votes Thank Flag Link Sat Aug 25, 2012
Hi Robert,

This is a question best posed to a lender. Timing is not the only issue. You'll have to show a responsible use of any credit since the filing and be within the required income and debt ratios.

I highly recommend Pete O'Donnell at Firt Home Mortgage (410) 299-2043. If you speak with him (no obligation) please let him know I sent you. Thanks!
0 votes Thank Flag Link Sat Aug 25, 2012
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