Mortgage After Chapter 13 Bankruptcy

Mortgage After Chapter 13 Bankruptcy Guidelines


In this guide on what are the eligibility and qualification requirements to qualify for a mortgage after Chapter 13 Bankruptcy, we will cover what type of mortgage loan program you can qualify for during and after the Chapter 13 Bankruptcy repayment plan. We will also cover the agency mortgage guidelines on qualifying for a mortgage after Chapter 13 Bankruptcy. Chapter 13 Bankruptcy is a court-ordered debt restructuring plan giving the petitioner time to pay their debts over a certain period of time mandated by the U.S. Bankruptcy Courts.

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Do You Have To Wait To Qualify For a Mortgage After Chapter 13 Bankruptcy?

Every loan program has its own mandatory waiting period guidelines on mortgage after bankruptcy. We will cover each mortgage loan program and its waiting period requirements to qualify for a mortgage after Chapter 13 Bankruptcy and Chapter 7 Bankruptcy later in this article. There are three different types of government-backed mortgage loans.

FHA loans, VA loans, and USDA loans. Fannie Mae and Freddie Mac set up the guidelines for conventional loans. Government and conventional loans have mandatory waiting period requirements for qualifying for a mortgage after Chapter 13 Bankruptcy. Non-QM mortgages one day out of bankruptcy do not require any waiting period after bankruptcy but do require a 30% down payment.
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Mortgage After Chapter 13 Bankruptcy Versus Chapter 7 Bankruptcy

Chapter 7 Bankruptcy gets discharged after 90 days after being filed. Chapter 13 Bankruptcy is an extended repayment plan before it gets discharged. Chapter 13 Bankruptcy is when the courts take a percentage of the petitioner’s wages and distribute it to debtors in reduced amounts accordingly.

Unlike, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy is an extended repayment plan where it gives consumers time to make good on their outstanding debts over a course of three to five years. In the next section, we will cover how Chapter 13 Bankruptcy works and how you can qualify for a mortgage after Chapter 13 Bankruptcy. The good news is a Chapter 13 Bankruptcy will not deter potential homebuyers from buying a home during today’s hot booming housing market.
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What Is Chapter 13 Bankruptcy and How Does It Work?

Chapter 13 Bankruptcy is normally a five-year debt repayment plan. Once the petitioner files for Chapter 13 Bankruptcy, they have a bankruptcy trustee assigned to their case. The trustee acts on behalf of the bankruptcy court and is the person who approves a mortgage if the petitioner were to request a home purchase and/or refinance. In this guide on mortgage after Chapter 13 Bankruptcy, we will discuss and cover qualifying for a mortgage during and after Chapter 13 Bankruptcy and the mortgage options homebuyers have.

Can I Qualify For a Mortgage After Chapter 13 Bankruptcy?

Homebuyers can qualify for a mortgage after Chapter 13 Bankruptcy discharge. However, depending on the loan program, there may be a waiting period requirement. FHA and VA loans are the only two mortgage loan programs that will not mandate a mandatory waiting period to qualify for a mortgage after Chapter 13 Bankruptcy.

However, if the Chapter 13 Bankruptcy discharge has not been seasoned for at least two years, it needs to be a manual underwrite. FHA and VA loans are the only two home loan programs that allow manual underwriting. We will discuss and cover more details on what manual underwriting is.
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How Soon After Filing Chapter 13 Bankruptcy Can I Qualify For Mortgage

Borrowers can qualify for an FHA and VA loan one year after filing Chapter 13 Bankruptcy. VA and FHA loans are the only two mortgage loan programs that allow people to qualify for a home purchase and/or refinance mortgage during the Chapter 13 Bankruptcy repayment plan. Chapter 13 Bankruptcy does not need to be discharged.

Chapter 13 Bankruptcy Trustee Approval on FHA and VA Loans

The trustee needs to sign off on the mortgage. Many people worry about getting trustee approval. The team at Non-QM Mortgage Lenders has never had a situation where a bankruptcy trustee signed off on a home mortgage during the Chapter 13 Bankruptcy repayment plan. As long as the borrowers can afford the proposed mortgage payments, it should be good. The trustee will definitely sign off on a modest home during the Chapter 13 Bankruptcy repayment plan.

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Waiting Period Requirements For Mortgage After Bankruptcy

Government and conventional loans have waiting period requirements after the Chapter 13 Bankruptcy discharge date. Here are the agency guidelines to qualify for a mortgage after Chapter 13  and Chapter 7 Bankruptcy discharge date:

HUD Mortgage After Chapter 13 Bankruptcy Guidelines on FHA Loans

HUD has no waiting period requirements after the Chapter 13 Bankruptcy discharge date on FHA loans. However, if the Chapter 13 Bankruptcy is not seasoned for two years after discharge, it needs to be manually underwritten. HUD has a two-year waiting period after the Chapter 7 Bankruptcy discharge date.

VA Mortgage After Chapter 13 Bankruptcy Guidelines

Veterans Affairs has no waiting period requirements after the Chapter 13 Bankruptcy discharge date on VA loans. However, if the Chapter 13 Bankruptcy is not seasoned for two years after discharge, it needs to be manually underwritten. Veterans Affairs has a two-year waiting period after the Chapter 7 Bankruptcy discharge date.

Fannie Mae and Freddie Mac Mortgage After Chapter 13 Bankruptcy Guidelines on Conventional Loans

Fannie Mae and Freddie Mac require a four-year waiting period after a Chapter 13 Bankruptcy dismissal date. Fannie Mae and Freddie Mac require a two-year waiting period after a Chapter 13 Bankruptcy discharge date. Fannie Mae and Freddie Mac require a four-year waiting period after a Chapter 7 Bankruptcy discharge date

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Non-QM Loans One Day Out of Bankruptcy and Foreclosure

Non-QM loans do not have a waiting period after bankruptcy and/or foreclosure. You can qualify for non-QM loans one day out of bankruptcy and foreclosure with no waiting period requirements. However, a 30% down payment is required. If you are looking for a mortgage lender with no overlays on mortgage after Chapter 13 Bankruptcy, please contact us at Non-QM Mortgage Lenders at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Non-QM Mortgage Lenders is available 7 days a week, on evenings, weekends, and holidays.  The team at Non-QM Mortgage Lenders,, Inc. is available 7 days a week, on eveings, weekends, and holidays.

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