After a Chapter 7 bankruptcy discharge...
â€¢ 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.)
â€¢ VA requires 2-years BK discharge
â€¢ USDA requires 3-years BK discharge (only 1 year for extenuating circumstances)
â€¢ 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.
Shane Milne | Lending in all 50 states | NMLS #81195