This ARTICLE On FHA Loans After Bankruptcy Waiting Period Guidelines And Requirements
We will be discussing FHA Loans After Bankruptcy Waiting Period Guidelines And Requirements for homebuyers on an FHA purchase loan and for homeowners on FHA refinance mortgages.
HUD, the parent of FHA, is the federal agency that is in charge of setting up the ground rules and agency mortgage guidelines on FHA loans. FHA loans are one of three government-backed home mortgage programs available in the U.S. FHA loans is one of the most popular home mortgage programs in the United States. HUD’s mission is to promote homeownership for hard-working Americans and have them able to be able to purchase a home. with a 3.5% down payment with a minimum of a 580 credit score. HUD makes qualifying for an FHA loan easy. FHA loans are very popular for first-time homebuyers with limited or no credit established. HUD makes it possible for homebuyers with a prior bankruptcy, foreclosure, deed in lieu of foreclosure, short sale, and period of bad credit to be able to qualify for an FHA loan.
Importance Of Rebuilt And Reestablished Credit After Bankruptcy And A Housing Event
HUD and lenders realize and fully understand people can have periods of a financial crisis. It can be for many reasons. People can lose their jobs, have medical issues, go through a divorce, have a death in the family, or have other extenuating circumstances. People can go through bankruptcy and/or foreclosure due to the economy, loss of business, or loss of jobs. However, eventually, people recover. Hardworking Americans will recover stronger than ever and most will want to purchase a home for their family.
The Role Of HUD
HUD wants to make homeownership possible for people who had prior financial issues, a prior bankruptcy and/or foreclosure, or other extenuating circumstances. HUD and mortgage lenders want to see people have rebuilt and reestablished their credit after a period of bad credit. Timely payments in the past 12 months are key in getting an approve/eligible per automated underwriting system (AUS). People can qualify for an FHA loan after bankruptcy and/or a housing event. However, FHA Loans After Bankruptcy Waiting Period Guidelines state borrowers need to meet the minimum waiting period requirements.
In this article, we will discuss and cover FHA Loans After Bankruptcy Waiting Period Guidelines And Requirements.
Types Of Bankruptcy
There are many different types of bankruptcies. However, the two most common bankruptcies for consumers are Chapter 7 and Chapter 13 Bankruptcy. FHA Loans After Bankruptcy Waiting Period Guidelines are different between Chapter 7 versus Chapter 13 Bankruptcy. HUD, the parent of FHA, and mortgage companies understand people can go through financial difficulties during periods of their lives. A financial crisis can happen to anyone. Poor, middle class, the rich. It can happen to any hard-working American worker. Over 54% of consumers file bankruptcy in the United States due so because of medical debts incurred. Other common reasons for filing bankruptcy are job loss and extended unemployment, loss of business, death in the family, divorce, or other extenuating circumstances.
Chapter 7 Bankruptcy Explained
Chapter 7 Bankruptcy is the most common type of consumer bankruptcy. Chapter 7 Bankruptcy is also referred to as total liquidation and benefits people with no job and/or in-between jobs and little to no assets. There is a maximum income cap to be eligible to file Chapter 7. Under the U.S. Bankruptcy Code, you can keep exempt assets and a certain amount of assets and still file Chapter 7 Bankruptcy.
Chapter 13 Bankruptcy Explained
Chapter 13 Bankruptcy is a repayment plan over a course of three to five years. Chapter 13 Bankruptcy benefits people who have jobs and assets but need to restructure their debts. A trustee is assigned by the Bankruptcy Court. The trustee will restructure the petitioner’s debts. A percentage of the petitioner’s monthly wages and allocates that portion to pay creditors. Most Chapter 13 Bankruptcy repayment plans are for 60 months. After the 60 months is over, the remaining outstanding debts of all creditors are discharged. We will discuss and cover the FHA Loans After Bankruptcy Mortgage Guidelines later in this article.
Qualifying For FHA Loans After Bankruptcy
FHA loans is the most popular home mortgage program in the nation. HUD’s mission is to make homeownership affordable for hard-working Americans. This is why HUD created very lenient agency mortgage guidelines. FHA loans are perfect for first-time homebuyers who have little to no credit established, borrowers with lower credit scores. and prior bad credit, borrowers with a prior bankruptcy and/or foreclosure, and homebuyers with little money for the down payment and closing costs on a home purchase. Many people go through financial difficulties where they file for bankruptcy. There is life after bankruptcy.
Bankruptcy is a federal law that helps Americans eliminate and discharge debts and get a financial start. You can become a homeowner after bankruptcy. You can have great credit after bankruptcy. Gustan Cho Associates have helped countless people achieve credit scores over 700 FICO in less than one year after the bankruptcy discharged date. Homebuyers can qualify for an FHA loan in just two years after the Chapter 7 Bankruptcy discharged date. People in the Chapter 13 Bankruptcy repayment plan are eligible to qualify for an FHA loan during the Chapter 13 repayment period after they have made 12 timely monthly payments. Chapter 13 Bankruptcy does not have to be discharged. There is no waiting period after the Chapter 13 Bankruptcy discharged date to qualify for an FHA loan. The team at Capital Lending Network, Inc. are experts in helping homebuyers qualify for an FHA loan during and after Chapter 13 Bankruptcy.
HUD Guidelines On FHA Loans After Chapter 7 Bankruptcy
Per HUD Handbook 4000.1, mortgage borrowers are eligible to qualify for an FHA loan after two years from the discharge date of Chapter 7 Bankruptcy discharged date. Just passing the two-year waiting period does not guarantee an FHA loan approval. Both the automated underwriting system (AUS) and lenders want to see borrowers have rebuilt and reestablished and rebuilt their credit. Late payments after bankruptcy and/or foreclosure are frowned upon and will present a problem. Borrowers should get three to five secured credit cards after the Chapter 7 Bankruptcy discharge date. Secured credit cards are the easiest and fastest way of rebuilding and re-establishing your credit after bankruptcy.
HUD Guidelines On FHA Loans During Chapter 13 Bankruptcy Repayment Plan
Mortgage loan applicants are eligible to qualify for FHA loans during the Chapter 13 Bankruptcy repayment plan. However, in order to qualify, the borrower needs to have been in the repayment plan for at least 12 months and have made 12 timely payments to the bankruptcy trustee. Chapter 13 Bankruptcy does not have to be discharged. The bankruptcy trustee needs to sign off the new home purchase and mortgage which is never a problem. The team at CLN never had an issue with a bankruptcy trustee not signing off on a home purchase and/or mortgage on a home purchase and/or a refinance. All FHA loans being processed during Chapter 13 Bankruptcy repayment plan are manual underwrites. HUD Manual Underwriting Guidelines apply. Capital Lending Network, Inc. are experts in helping borrowers qualify for FHA loans during Chapter 13 Bankruptcy repayment plan. CLN is one of the very few national mortgage companies with no lender overlays on government and conventional loans.
HUD Guidelines On FHA Loans After Chapter 13 Bankruptcy Discharged Date
Mortgage loan applicants can qualify for an FHA loan after the Chapter 13 Bankruptcy discharge date with no waiting period requirements. There are no waiting period requirements after the Chapter 13 Bankruptcy discharge date. However, any borrowers with Chapter 13 Bankruptcy discharge that has not been seasoned for at least two years need to be manually underwritten. Borrowers need to meet all other HUD Agency Mortgage Guidelines. Timely payments during and after Chapter 13 Bankruptcy will be closely looked at by mortgage underwriters. Late payments during Chapter 13 repayment and/or after the discharged date may disqualify borrowers. One or two late payments during and/or after Chapter 13 Bankruptcy is not always a deal killer.
Contact Us At Gustan Cho Associates dba Capital Lending Network, Inc. To Qualify For A Mortgage With No Lender Overlays
The team at Capital Lending Network, Inc. have helped thousands of borrower during and after Chapter 13 Bankruptcy. Rebuilt and reestablished credit is very important for those who went through Chapter 13 Bankruptcy. Get three to five secured credit cards with at least $500 credit limits. Secured credit cards are the easiest and fastest way to rebuild and re-establish credit after bankruptcy. Get one or two installment loans on top of the three to five secured credit cards to maximize your credit profile. CLN has credit guides to help you achieve this goal.
Click on the following resource links below that helped many of our viewers and clients at Gustan Cho Associates dba Capital Lending Network, LLC.