FAQ # 10 Can I buy a home after a bankruptcy, foreclosure or short sale?
This really isn’t a yes or no question. It depends on the type of bankruptcy and the type of financing you are applying for in the purchase.
Here is a quick overview that gives you the length of time you must wait before making that next purchase.
FHA financing requires 2 year after discharge on Chapter 7 bankruptcy, 12 months of payment and trustee approval on a Chapter 13, 3 years on a foreclosure, short sale or deed in lieu of foreclosure.
Conventional financing – the amount of time will vary depending on the percentage of the down payment after a foreclosure, short sale or deed in lieu. 4 years after a Chapter 7 discharge or Chapter 13 dismissal and 2 years after Chapter 13 discharge.
VA financing will require 2 years for foreclosure, bankruptcy Chapter 7, short sale and deed in lieu.
Also, keep in mind any type of public record, such as a foreclosure, bankruptcy or judgment can negatively impact your credit score by 100-200 points. After a bankruptcy you will need to re-establish credit and demonstrate an on time payment history and financial responsibility.
Consult with your mortgage professional if any of these issues pertain to you before you start looking for a new home as these guidelines are always subject to change.