A Chapter 7 bankruptcy (liquidation) does not disqualify a FHA mortgage applicants from obtaining approval from an FHA mortgage lender. if, at the time of case number assignment or FHA mortgage application , at least (2) two years have elapsed since the date of the Chapter 7 bankruptcy discharge. During this time, the FHA mortgage applicants must have:
- Re-established good credit payment history including timely rent and credit accounts ; or
- chosen not to incur new credit collection obligation since filing the bankruptcy.
AFTER CHAPTER 7 BANKRUPTCY MINIMUM WAIT TIME
An elapsed period of less than 24 months or 2 two years, but not less than 12 months, may be acceptable,
if the FHA mortgage applicants :
- can show that the bankruptcy was caused by extenuating circumstances beyond the FHA mortgage applicants ’s control; and
- has since exhibited a documented ability to manage their financial affairs in a responsible manner.
AFTER CHAPTER 13 BANKRUPTCY QUALIFICATIONS
A Chapter 13 bankruptcy does not disqualify a FHA mortgage applicants from obtaining an FHA-insured Mortgage, if at the time of case number assignment or FHA mortgage application at least 12 months of the pay-out period under the bankruptcy has elapsed.
The FHA mortgage lenders must determine that during this time, the FHA mortgage applicants ’s payment performance has been timely and all required payments have been made on time; and the FHA mortgage applicants has received written permission from bankruptcy trustee to enter into the mortgage transaction.