New Home Loan Waiting Periods After Bankruptcy, Short Sale, Foreclosure or Deed In Lieu of Foreclosure

Real Estate Agent with RE/MAX Executive Realty - The Powell Team NC License# 202938

Have you had a Bankruptcy, Foreclosure, Short Sale or Deed in Lieu of Foreclosure and are wondering how long you have to wait before you can obtain a new home loan?  Here are the guidelines as of Februrary 2011, which I verified with a loan officer friend. 

Of course, every rule is made to be broken and under the right circumstances of reestablished credit and an underwriter waiver/exception you may be able to qualify for a new home loan in less time than the general seasoning periods.  A seasoning period, in this case, is the mortgage industry term for waiting period.


Chapter 7- FHA & VA require two years seasoning. Conventional loans now require four years seasoning. If the bankruptcy has been discharged at least one year and less than two years, it is possible to obtain an FHA or VA mortgage. It must be documented that the bankruptcy was due to an extenuating circumstance. For example a loss of job, acts of nature, medical emergencies, etc. USDA Rural Development generally requires three years seasoning after discharge, but may make an exception before that with reestablished credit and an underwriter "waiver".                                                                     

Chapter 13- This type of filing indicates an effort to pay creditors. FHA and VA will allow borrowers to purchase a home after one year from the date of discharge if the payments have been made on time and their payment performance has been satisfactory. Conventional loans require 2 years from discharge date of 4 years from dismissal date.  USDA Rural Development generally requires three years seasoning after dismissal, but may make an exception before that with reestablished credit and an underwriter "waiver".       


Conventional and VA loans require two years minimum seasoning on a short sale.                               

FHA will allow borrowers to obtain a new mortgage after a short sale if: The borrower was current on their mortgage and other debts at the time of the short sale and proceeds from the short sale serve as payment in full.       

FHA will not allow borrowers to obtain a new mortgage after a short sale if: The borrower is taking advantage of a declining market or are purchasing a similar or superior property at a reduced price within commuting distance.                                                                                                               

♦ USDA Rural Development generally requires three years seasoning after discharge, but may make an exception before that with reestablished credit and an underwriter "waiver".    


FHA requires three years seasoning on a borrower with a previous foreclosure or deed -in-lieu of foreclosure. If extenuating circumstances can be documented exceptions can be granted.                       

Conventional loans now require a seven year time period from completion date.                                  

VA loans require a two year seasoning period before acquiring a new VA loan. If the foreclosure was on a VA loan then the applicant may not have full entitlement available for the new loan.                               

USDA Rural Development generally requires three years seasoning after discharge, but may make an exception before that with reestablished credit and an underwriter "waiver".       

Contact me anytime if I can help in any way.  I'd love to help you find your new home!

Cheryl Powell- The Powell Team- Remax Executive Realty


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after bankruptcy
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Cheryl Powell - The Powell Team
RE/MAX Executive Realty - The Powell Team - Harrisburg, NC
Concord,Harrisburg & Charlotte NC Area Real Estate

WOW, that is great Terri.  Thanks for sharing this program with us.  Although most people who just lost their home to short sale or foreclosure wouldn't have 25% downpayment and 6 months of payment reserves left after funds needed for closing, it could work for some people.

Apr 22, 2013 06:44 AM #18

My wife and I have a Chapter 7 now discharged for 2 years. We rolled the house into the BK beofre ever going into FC and moved out of the house before house ever went into FC. I understand FHA is 2 years for BK and 3 years for FC. However, I have talked to my attorney on several occasions and he is very addiment that it is not considered a FC since it was dismissed at time of discharge. Please help clarify if this is considered a foreclosure or just a BK. Will lenders look at this as a BK or FC? We want to purchase a new home and it is now at the 2 years mark since BK discharge. If lenders look at this as a FC it will be about 2.5 more years, which is insane. 

Aug 19, 2013 02:52 PM #21
Michael J. Perry
KELLER WILLIAMS Central PA East - Lancaster, PA
Lancaster Relo Specialist

Bookmarked and Suggested !!! Pls. View our RELO message - 

Jul 24, 2014 04:25 AM #23
Les & Sarah Oswald
Eastvale Team Realty & Property Mgmt - Eastvale, CA
Broker, Realtor, SFR, PMC and Investor

These time lines are sure to come in handy. I met a buyer over the weekend who had a SS in 2009 and thought he needed to wait 10 years. I informed him of his mistake and we are now looking for a home.

Aug 22, 2014 11:38 PM #24
Sandy Padula and Norm Padula, JD, GRI
Allison James Estates & Homes - San Diego, CA
Presence,Persistence & Perseverance

Cheryl: Good information here in your blog. Still, many of the 'calls' on whether to extend credit is up to the determination of the specific lender in formerly distressed buyer scenarios. Then once the buyer secures a credit approval letter, and a contract ona target home is ratified, the dreaded underwriters!

Aug 23, 2014 08:49 AM #25
Tony Garcia
Banc Home Loans - Charlotte, NC
Lending With Integrity Nationwide



For FHA it will be 3 years after the transfer date of title.


For conventional it will be 4 years after the discharge of the BKl, you will need to document the mortgage was included in the BK.



Aug 26, 2014 07:07 PM #26
Tony Garcia
Banc Home Loans - Charlotte, NC
Lending With Integrity Nationwide


The new waiting period after short sale is now 4 years on conventional loans, with no LTV restrictions.


VA technically doesn't have a waiting period (for short sales), most lenders have an overlay that require 2 years.

Aug 26, 2014 07:09 PM #27
Inna Ivchenko
Mannis Real Estate Group - Calabasas, CA
Realtor® • Green • GRI • HAFA • PSC Los Angeles CA

Great information!

I knew that as of August 16 Fannie Mae requires a 4 year waiting period after a short sale( the buydown LTV's have been eliminated).

But there is much more to it.

Boomerang buyers are back into the market. Hopefully, they will learn from their experience.

Sep 08, 2014 01:52 AM #28
Lisa Perry
FHA, VA, Jumbo, Downpayment Assistance, Conv. - Stafford, VA
Northern VA-80/15/5 100% Loans - Grant Money

Great information.  Some of the stuff is more Lender overlays.

Sep 10, 2014 09:12 AM #29
Cheryl Powell - The Powell Team
RE/MAX Executive Realty - The Powell Team - Harrisburg, NC
Concord,Harrisburg & Charlotte NC Area Real Estate

Thanks everyone for commenting.  I originally posted this in February 2011, so some of the information is outdated.  These guidelines were supposed to be the standard guidelines, with lender overlays varying between lenders.

Sep 10, 2014 01:30 PM #30
Jeff Jensen
The Federal Savings Bank/Lending in 50 states - Greenwich, CT

I always keep the chart handy as that is a frequently asked question.

Sep 10, 2014 03:11 PM #31
Kathleen Luiten
Resort and Second-Home Specialist - Princeville, HI

Glad you noted the original blog was in 2011. So much keeps changing, I always refer the client to a mortgage broker to be sure. But like Jeff Jensen I like having a chart handy.

Sep 24, 2014 05:47 PM #33
Karen Mathers - YOUR Vero Beach, FL Realtor
Keller Williams Realty - Vero Beach, FL
When it Matters, Choose Mathers! 772-532-3221

Great information Cheryl!  I thing many individuals may be surprised with these time frames.  I have heard many people express a feeling that due to past issues they will never own a home again.  

Sep 26, 2014 06:41 AM #34
Scott Gleason
RE/MAX Properties Unlimited - Westfield, NJ
Westfield NJ New Homes Specialist

Good Blog Cheryl, also some good comments here.


Oct 10, 2014 02:47 PM #37
Michael Williams

Just wanted to share that I spoke with VA today and they do make some exceptions to the 2 year rule. This is due to the current environment.

Mar 20, 2015 01:20 PM #47
MR Evans Johnson

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Apr 09, 2015 03:07 PM #48
carrie dia
As a veteran or active duty service member, you’re entitled to a variety of exclusive benefits that are created to both protect and help you – from helping with your health benefits to understanding your finances. However, even the most responsible and conscientious homeowner can be faced with difficult financial issues that require them to file for bankruptcy.


When faced with this harsh reality, many service members worry that filing for bankruptcy will keep them from ever using their VA home loan benefits again. But that can’t be further from the truth. You can absolutely get a home with a VA loan if you’ve applied for bankruptcy in the past – it’s just a matter of understanding the process.


Once you receive a discharge date from bankruptcy, you can expect to wait at least two years before being eligible for your home loan benefits. It’s important to note that it’s not two years from the date you filed, but two years from your discharge date.  


Sometimes, the Department of Veterans Affairs will provide an exception to allow for using your VA loan benefits sooner.  This could be something as simple as proving that the bankruptcy was out of your control (i.e. death, sickness or divorce causing a loss of income) to showing the lender court-approved payments made on a regular basis along with a VA-approved reason for bankruptcy.
May 04, 2015 01:36 AM #49
khadija mirza

if the home was part of BK then the seasoning of the foreclsoure ends with BK on conventional loans .
contact me direct for any info you might need on any types of loans, jumbo / conventional /va or FHA . we are a direct lender and will give home loans to people who had a foreclsoure yesterday ... we have no seasoning requirment as long as the fico is 670 and you have 20 percent down .
Mr Johnson i read your blog right above .. its not good to lead people on and make them think that you can lend at 3% ... there is no 3% in the market especially with bad credit. To raise any ones hope just to get them to call you and then sell them some thing else is called 'bait and switch .... honest good lenders do not indulge in these practices .

May 05, 2015 01:28 PM #50
julisa solo


The VA home loan program is available to non-veterans, too. This eligibility class includes certain active military borrowers, their families, and others.

Servicepersons On Active Duty

Active-duty servicepersons can be eligible for a VA loan after they have served 90 days of continuous active duty. Army, Navy, Air Force and Marines are eligible.

Military Spouses

Some military spouses can be eligible for a VA loan, too.

If the serviceperson to whom the spouse is married is alive, the spouse can be eligible if the serviceperson has been officially declared missing in action (MIA) or a prisoner of war (POW) for at least 90 days. This eligibility is limited to one-time use.

If the serviceperson to whom the spouse was married has died, the surviving spouse can be eligible if he or she hasn't remarried and the serviceperson died on active duty, was a totally disabled veteran or was a veteran who died as a result of a service-connected disability.

Spouses who have remarried may be subject to more complicated rules. Click to see today's rates is advised to determine eligibility.

May 15, 2015 02:57 AM #51

Wow! Nice article.
NJ FHA home loans

Jun 26, 2015 03:12 AM #52
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Concord,Harrisburg & Charlotte NC Area Real Estate
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