Home Buying in Sacramento>Question Details

keroppis2, Other/Just Looking in Sacramento, CA

How long after filing personal CH 7 Bankruptcy must one wait prior to getting a home loan?

Asked by keroppis2, Sacramento, CA Fri Dec 7, 2012

BKCY discharged April 2012
Also what interest rates can I expect? Could I still qualify for "first time home buyer" assistance programs?

Help the community by answering this question:


For Chapter 7 bankruptcies:

• FHA requires 2-years BK discharge (only 1 year if it was due to extenuating circumstances, such as medical or death of a wage earner, etc.)
• VA requires 2-years BK discharge
• USDA requires 3-years BK discharge (only 1 year for extenuating circumstances)
• Fannie Mae & Freddie Mac require 4 years (only 2 years for extenuating circumstances)

In all situations you need at least 12 months of re-established credit and 3 traditional trade lines, some lenders want 3 trade lines of 12 months each. Trade lines that survived a BK, such as a credit card you kept open, a car loan you maintained payments on/didn't include, student loans that you are making payments on that couldn't be included, etc. can count towards the re-established credit.

Other than medical collections that can be properly explained, if there are any late payments or delinquent accounts (collections, charge-offs, judgments, tax liens) after the BK or foreclosure then the time seasoning often starts over again from the latest late payment/delinquent mark (underwriter's discretion). Having a verifiable on time housing payment history goes a long way to making an underwriter feel comfortable, as well as taking a pre-purchase housing counseling class with a budgeting/financial model. Practically anything you can do to prove that you have made & kept a vow to make all payments on time will be helpful.

You could expect the same interest rates as someone who never had a bankruptcy, as there are no rate increases for someone who had a bankruptcy vs. someone who didn't.

First time homebuyer assistance programs require that you have not owned a home in the prior 3 years from when you obtain the assistance, and the fact that you had a prior bankruptcy wouldn't impact your ability to qualify for them.

Shane Milne | Lending in all 50 states | NMLS #81195
1 vote Thank Flag Link Fri Dec 7, 2012
Hi keroppis2
Hi keroppis2

A reverse mortgage is a loan for senior homeowners that uses a portion of the home's equity as collateral. The loan generally does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. At that time, the estate has approximately 6 months to repay the balance of the reverse mortgage or sell the home to pay off the balance.
All remaining equity is inherited by the estate. The estate is not personally liable if the home sells for less than the balance of the reverse mortgage.

http://www.reversemortgagelendersdirect.com/reverse-mortgage-loan/ http://www.reversemortgagelendersdirect.com/reverse-mortgage… http://www.reversemortgagelendersdirect.com/reverse-mortgage… http://www.reversemortgagelendersdirect.com/reverse-mortgage…
0 votes Thank Flag Link Thu Oct 17, 2013
CFS Mortgage, http://www.cfsflex.com, has a flexible loan program. They allow a mortgage after a foreclosure, short sale, or chapter 7 bankruptcy. There is only a six month waiting period. This is perfect for individuals looking to become homeowners again.
0 votes Thank Flag Link Sun Aug 4, 2013
keroppis2, it doesn't hurt to speak to a loan officer now so you can ask as many questions about the process as you'd like. If you'd like, you can even complete a loan application now but it's really not necessary until you get closer to the 2-year mark.

You can find a list of commonly used mortgage terms/abbreviations/acronyms in my blog at http://www.trulia.com/blog/shanethemortgageman/2011/10/mortg… so you when you speak to a loan officer you'll be somewhat familiar with some of the "industry jargon" that is used. However a loan officer should be able to explain what they are talking about in layman's terms, so it's not exactly necessary, but still can be helpful.

http://www.trulia.com/blog/shanethemortgageman/2011/09/list_… lists the information you should be prepared with when you will be discussing your situation with a loan officer.

http://www.trulia.com/blog/shanethemortgageman/2011/05/the_m… explains the process your loan will normally take from the pre-approval until the closing.

However for someone who hasn't ever purchased a home before, it's best to ask a ton of questions, every question you can think of. That is how you'll become comfortable with the process and know exactly what to expect.

Shane Milne | Lending in all 50 states | NMLS #81195
0 votes Thank Flag Link Fri Jan 25, 2013
You will have to wait for 2 years after the BK discharge date to qualify so you have a little over a year to wait. You then may consider many loan programs to fit your needs depending on your down payment you have at that time. You may consider from half percent down and up to 22% down with no mortgage insurance FHA. It doesn't matter how high your fico score is to qualify until you hit the 2 year mark. You may qualify for a hard money loan if you want with maybe 35% down?

You may consider CHF Access half percent down payment program which does not require first time homebuyer but you have to have 2 years from a BK to qualify. Your only option is hard money loan right now... Here is an application when your ready. https://secure.jotform.us/form/22950899219164

Sheryl Arndt, Real Estate Broker - Sr. Loan Officer CA only
REO & Short Sale Specialist
Credit Repair At No Cost
20+ Years Experience
DRE# 01140252
NMLS# 297251
9am till 9pm 7 days
0 votes Thank Flag Link Thu Jan 24, 2013
I appreciate the responses from each of you.

I am in the process of re-establishing credit. My credit score was recently obtained; 748. My ch 7 BKCY was discharged in April 2012.

Is there an prequalification app I could fill or what direction should I take? I will be a first time homebuyer so I am unfamiliar with terms and processes.
0 votes Thank Flag Link Thu Jan 24, 2013
You will have a 2 years minimum wait to qualify FHA after the discharge date of a Chapter 7 BK. You will have a 4 year wait to obtain Conventional financing. You may qualify at that time for an FHA loan with a minimum 580 fico score. You may also qualify for CHF Access half percent down payment program with a minimum 580 fico and also which can also contribute towards your closing costs as well. The interest rates and loan programs are dependant on what your fico scores are. A minimum 580 fico score today may still qualify for an FHA 30 year fixed rate under 4%. Yes, you will qualify as a first time homebuyer by not owning a home for 3 years. If you also had a foreclosure/short sale, you will have a 3 year wait to qualify.

I specialize in Under 640 Fico Score Loans and offer credit repair at no cost to qualify. Pay all monthly payments on time and check your credit a few months in advance to see if there is going to be any credit repair needed to obtain fianancing.


Sheryl Arndt, Real Estate Broker – Sr. Loan Officer CA only
REO & Short Sale Specialist
Credit Repair At No Cost
20+ Years Experience
DRE# 01140252
NMLS# 297251
0 votes Thank Flag Link Fri Dec 14, 2012
Depends on the type of loan you need. Contact a local lender that has experience in your area.
0 votes Thank Flag Link Tue Dec 11, 2012
I have been a Mortgage Trainer for over 15 years.

The answer by Shane Milne is a great answer.

The only thing I would add is, you should call him and have him put you on a plan. This way you will be ready to go.

Jamie Collins
J.E. Collins Insurance Agency
Over 23 years in the Real Estate Industryjavascript:{}
0 votes Thank Flag Link Fri Dec 7, 2012
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