Can I buy a Home in Memphis Tennessee after a Bankruptcy

Mortgage and Lending with Van Dyk Mortgage NMLS:98535,Corp 3035

You can buy a home after a Bankruptcy in Memphis Tennessee

In contrast to public opinion, you do not always need to wait a very long time following a bankruptcy to qualify for a new home loan.  While most loan programs do require a waiting period of  3-5 years after a bankruptcy to purchase a new home, there is one program that will still allow you purchase a new home one day out of bankruptcy.  In fact, it even allows some to purchase a home while still in bankruptcy.

The FHA Guidelines state in the 4155.1:

"A Chapter 13 bankruptcy does not disqualify a borrower from obtaining an FHA-insured mortgage provided the lender documents that one year of the payout period under the bankruptcy has elapsed and the borrower’s payment performance has been satisfactory (i.e., all required payments made on time). In addition, the borrower must receive permission from the court to enter into the mortgage transaction.

 FHA loan loan guidelines require Chapter 13 bankruptcy payments have been made in a timely manner and that all other debts have been paid on time since the date of the bankruptcy. (The minimum credit score requirements still apply,therefore  it is critical to know how your creditors are reporting your payment history.  They should not still be reporting late payments on accounts included in the bankruptcy)

Additionally, if you are still in the repayment plan of a chapter 13 bankruptcy,you would need to get written permission from the bankruptcy court to obtain the new mortgage debt.  

A chapter 7 bankruptcy, where all of your debts are wiped out, require a little more time before FHA will approve a new loan.  The minimum amount time after a Chapter 7 bankruptcy in the Memphis, TN area is 2 years following the discharge date.  However, FHA does allow for extenuating circumstances to shorten that time frame to 1 year.  While it is possible to get an FHA loan after 1 year following a Ch. 7, it is not likely.  The FHA guidelines requires that circumstances be fairly drasitic to approve the extenuating circumstances waiver.  Events such as the death of a primary wage earner, or sickness would qualify, while a divorce would not.

If you think you may qualify for a FHA home loan based on the information above or if you would like to discuss your situation to see if you too can benefit from the FHA loan program that allows you to purchase a new  home loan after filing for a Ch 13 bankruptcy, please feel free to call me at 866.435.6553 or you can visit me online at 

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VanDyk Mortgage NMLS # 3035


Bill McDonald-VanDyk Mortgage

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Knoxville, TN 37909

(865) 686-8711

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