Can You Qualify for a Home Loan After Bankruptcy?


Quick Answer

It is possible for home buyers to qualify for a home loan at least 1 year after bankruptcy, as stated by Nolo. Mortgage lenders want to see that the applicant's finances are back in order and may also require the applicants have a moderate to high credit score.

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Full Answer

Homebuyers may have to put off their plans of home ownership for a couple of years after going through a bankruptcy. The length of time varies by loan type, but the fastest option, USDA loans, require at least 12 months of on-time payments for those going through Chapter 12 bankruptcy, as stated by Nolo. These types of loans also require a 3-year waiting period after Chapter 7 bankruptcy. Other loan types, such as FHA, VA and conventional loans require waiting a minimum of 2 to 4 years before considering applicants with a bankruptcy on their credit.

During the waiting period, home buyers can work on rebuilding their credit with secured credit cards to get their credit score back up. They can also save up a down payment, as stated by the National Association of REALTORS. A high credit score, 30 percent down payment and good debt-to-income ratio helps improve a buyer's chances of getting their loan application approved.

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