Home Buying in 44223>Question Details

Kimberlyehma…, Home Buyer in Cuyahoga Falls, OH

Buying after chapter 13 discharge?

Asked by Kimberlyehmann, Cuyahoga Falls, OH Thu Dec 19, 2013

My husbands chapter 13 (which ended up all creditors being paid in full instead if partial) was discharged about a year & a half ago. We are currently renting a house that turned out to be in awful shape & want to buy a home as soon as possible. How long is the waiting period before you can apply for a home loan after discharge of a chapter 13? We have 2 unsecured credit cards we've had for about a year we've made all payments on time also. We have regular bank accounts but are also members of a credit union that advertises loans.

Help the community by answering this question:


Chapter 13 rules are tricky Kimberly. With Conventional loans it is pretty cut and dry. In most cases it's 4 years, but with extenuating circumstances it can be as little as 2 years.

If you are still IN chapter 13, FHA guidelines may permit you to obtain a new loan if the following apply:
- one year of the pay-out period under the bankruptcy has elapsed
· the borrower’s payment performance has been satisfactory and all required
payments have been made on time, and
· the borrower has received written permission from bankruptcy court to enter
into the mortgage transaction.

If the BK has been discharged and 2 years have elapsed then it will be much easier to get approved, provided you have re-established good credit with no lates since. Technically, the guidelines allow you to apply 1 year out of discharge, but they say your application must be downgraded to a REFER and be manually reviewed by a Direct Endorsement (DE) underwriter. This means there will be additional restrictions placed on you, with regards to debt ratios and such. In addition, some lenders might not even touch that deal or they may place additional lender overlays in place.

In either case, I would speak to a lender soon. Even if you need to wait until the 2 year mark, it doesn't hurt to check things out 6 months ahead to see if there is anything you need to work on to get yourself in shape before then.

Feel free to call me if you would like assistance.


Tony Grech | Mortgage Loan Originator | NMLS 977416
PMAC Lending Services, Inc.
Toll-free (855) 642-4762 | Fax (248) 945-4842 | Direct (248) 728-0078
0 votes Thank Flag Link Thu Dec 19, 2013
Hi Kimberly, I agree it's 12 months (on Chapter 13) for FHA, USDA and VA. Conventional financing would require a full two years. I'm located here in Ohio, our office is in Medina. If I can answer any add'l questions, I'd be happy to help! Best wishes otherwise, Kimberly Lawson, Ohio Licensed Mortgage Loan Originator. Contact and licensing information can be found on my profile.
0 votes Thank Flag Link Thu Dec 19, 2013
Not that you're interested specifically in conventional financing but, I should clarify my post just in case any one else reads this - Conventional financing requires 2 yrs seasoning if there are extenuating circumstances. Without extenuating circumstances, it's a 4 year waiting period.
Flag Thu Dec 19, 2013
It is a 1 year waiting period unless the lender has overlay.

Let's discuss your loan scenario in more detail.Contact me at 800 315 8803. My name is Bart and I have been in the mortgage business since 1987. I am happy to answer your mortgage questions, 7 days a week and review your loan scenario.

Until then, I look forward to hearing from you.

Bart Gabe - 800 315 8803
Lending Since 1987
0 votes Thank Flag Link Thu Dec 19, 2013
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