Contrary to popular belief, acquiring a mortgage after filing for bankruptcy is not impossible. The Federal Housing Administration insures mortgages despite bankruptcy, with seasoning requirements.
- Per the FHA Guidelines, a debtor must wait at least two years after a Chapter 7 or 13 is discharged before you can qualify for a mortgage.
- FHA makes an exception to the two-year waiting period for Chapter 7 filings. If you had to file due to extenuating circumstances beyond your control, such as a medical condition or physical disability that kept you out of work, you may qualify after a 12-month waiting period post discharge. FHA requires you to document responsible financial management in the interim.
- You must obtain court permission to enter into the mortgage transaction after a Chapter 13, according to the FHA Handbook. Chapter 7 filings have no such requirement, although you must have reestablished good credit without incurring new credit obligations.
In closing, while bankruptcy will significantly impact your credit, you are able to obtain a mortgage within two years if the above requirements are met.