FHA loan and Bankruptcy?

My husband filed bankruptcy 3 months ago. I was wondering when we would be able to apply for a FHA loan. We were told maybe around 6 months after filing.

Also when is the best time frame to start looking at houses.

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  • Bob
    Lv 6
    7 years ago
    Best Answer

    FHA will require at least two years after a Chapter 7 bankruptcy is discharged, and you will also need to have a re-established credit for at least a year after the discharge. If your bankruptcy was a Chapter 13, you will need to have made all of your payments on time for at least a year and you will need to have permission from the Bankruptcy Court to take on a new mortgage. The link below to the FHA website gives more details.

    There is more than just the time involved. You will need to meet the lender's normal qualifications for income and credit, so you will probably need a credit score of at least 640 which is not always easy to do following a bankruptcy. Unless you are keeping some credit accounts open through the bankruptcy, you will probably have to open new credit accounts soon after the bankruptcy to re-establish your credit. You may have to use secured credit cards and/or loans with a strong co-signer since it will be difficult to get approval for traditional credit. Lenders will have no tolerance for any late payments after your bankruptcy that appear in your credit report.

    http://portalapps.hud.gov/FHAFAQ/controllerServlet...

    Source(s): Licensed Loan Officer in Ohio
  • Anonymous
    5 years ago

    You should take a look at the options you can find at: CREDIT-SOLUTIONS.INFO-

    RE FHA loan and Bankruptcy?

    My husband filed bankruptcy 3 months ago. I was wondering when we would be able to apply for a FHA loan. We were told maybe around 6 months after filing.

    Also when is the best time frame to start looking at houses.

  • 7 years ago

    The bankrutpcy hasn't been discharged yet and you're already trying to pile up new bills? What if the judge changes your chapter 7 to a chapter 13 and makes you pay back all your bills in part? What's the hurry to get into debt about? Can you even afford a house is a good question and the answer probably is "no". Usually when a person gets into a house they have to have 20% down. If your husband just filed bankruptcy he wouldn't have that 20% downpayment, he'd have to save it over several years. When I worked in a bankruptcy attorney's office years ago the court used to say that if you came into money within 10 years after bankruptcy you'd have to put that money toward the bills you just got discharged in that bankruptcy you filed.

  • 7 years ago

    Doody head - the person that told you only 6 months.

    More like 3 YEARS.

    Do not listen to that "friend" for financial advise ever again.

    Put 20% on your next home so you can avoid that nasty PMI.

    PMI is like throwing thousands away.

    It does not go towards principal, interest, and it's not even tax deductible.

    So... hunker down and start saving.

    Get a book by Dave Ramsey or Suze Orman.

    Read, read, read.

    And, you are breaking a rule.

    No one looks at houses without a pre-approval letter from a bank for a mortgage.

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  • Anonymous
    5 years ago

    Certainly bankruptcy is not something to enter into lightly, and as a responsible consumer you should make every effort to avoid a debt-ridden situation. Still, events sometimes conspire against us...

  • LILL
    Lv 7
    7 years ago

    No. You will have to wait a minimum of 3 years. Some lenders will require that you wait 5-7 years.

  • 7 years ago

    Really? 6 Months? Go to Clark Howard's website and call a team member.

    -You might want to take "Financial Peace University" at a local church before you get back in the market. (See:Dave Ramsay's website)

    -Check "myfico.com" for your credit scores& annualcreditreport.com for your credit reports.

    Good Luck!

  • 7 years ago

    This is horrifying.

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