When can I buy a house after bankruptcy?
The most common types of bankruptcy are Chapter 7 and Chapter 13. The chapter you file under will play a role in how soon you can be eligible to purchase a home.
The type of loan will also play a role in determining when you’re eligible to purchase a home. Different mortgage programs can have different “seasoning periods” following a bankruptcy or foreclosure. Lenders may have their own in-house requirements on top of that.
With Chapter 7 bankruptcy, the seasoning clock begins when the action is discharged, not when your case is filed. From the point of discharge, there is typically a four-year wait for conventional loans and a two-year wait for either FHA or VA financing. (The FHA’s short-term “Back to Work” program offers qualified borrowers the possibility of even faster movement after both bankruptcy and foreclosure.)
Chapter 13 bankruptcies can be a little different. You may be able to obtain a new loan to purchase a home or refinance your home while in your Chapter 13 bankruptcy (but you’ll need Court permission and this process may take several months). You might be able to land a conventional loan two years after a Chapter 13 discharge. FHA and VA loans are even more lenient. Borrowers can be eligible for these government-backed loans just a year removed from filing a Chapter 13 bankruptcy. They’ll typically need to show at least 12 consecutive months of on-time payments and permission from the court to take on new debt.