Please see the following article regarding updates on Bankruptcy Rules and Programs which allow for a new loan 12 months after discharge date.
Bankruptcy rules have recently changed according to The U.S. Department of Housing and Urban Development.
HUD recently announced a change to the Bankruptcy Rules for FHA loans! The â€œBack to Work â€“ Extenuating Circumstancesâ€ program. Aimed to help people who have lost their home through foreclosure, short sale or bankruptcy. HUD has changed the bankruptcy rules that previously required minimum of 24 months, to 12 months.bankruptcy rules, buy a home after bankruptcy, how long after bankruptcy, fha bankruptcy guidelines
Bankruptcy Rules and the Minimum Eligibility Requirements:
To qualify, the borrower must meet several minimum eligibility requirements. The borrower must have experienced an â€œeconomic event,â€ which is any occurrence beyond the borrowerâ€™s control that resulted in a loss of employment, loss of income or a combination of both that caused a reduction in the borrowerâ€™s household income by 20% or greater that lasted at least six months or longer. The borrower must have recovered from the â€œeconomic eventâ€ with the re-establishment of satisfactory credit for a minimum of 12 months and the borrower must attend housing counseling from an approved HUD Housing Counseling Agency.
Second Chance Product Highlights:
Â· Previous bankruptcy, foreclosures and short-sales are acceptable.
Â· No longer need to wait three years after a previous foreclosure or two years after a bankruptcy to obtain affordable financing. The minimum is now 12 months.
Â· Only a 3.5% down payment is required (minimum credit score of 580 required for maximum financing).
Â· No income restrictions.
Â· Gift funds permitted.
Â· Single-family maximum loan amount of $729,750 in high-cost living areas.
Â· First-time homebuyers are acceptable.