Financing After Bankruptcy or Foreclosure

Post Foreclosure, Bankruptcy & Short Sale

Waiting Period Matrix

Occurrence Conventional FHA VA USDA Rural Jumbo
Foreclosure 7 Years from completion date 3 years from completion date 2 years from completion date 3 years from completion date 5-7 years from completion date
Short Sale 2 years with max 80% LTV
4 years with max 90% LTV
7 years LTV for all LTV's
3 years from completion date 2 years from completion date 3 years from completion date 5-7 years from completion date
Ch. 7 Bankruptcy 4 years from discharge or dismissal date 2 years from discharge date 2 years from discharge date 3 years from discharge date 4-7 years from discharge date
Ch. 13 Bankruptcy 2 years from discharge date
4 years from dismissal date
1 year of the payout must elapse and payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage 1 year of the payout must elapse and payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage 3 years from discharge date 4-7 years from completion date

If a borrower claims that derogatory information is the result of extenuating circumstances, the lender must substantiate the borrower’s claim. Examples of documentation that can be used to support extenuating circumstances include documents that confirm the event (such as a copy of a divorce decree, medical reports or bills, notice of job layoff, job severance papers, etc.) and documents that illustrate factors that contributed to the borrower’s inability to resolve the problems that resulted from the event (such as a copy of insurance papers or claim settlements, property listing agreements, lease agreements, tax returns (covering the periods prior to, during, and after a loss of employment), etc.).

Extenuating circumstances are nonrecurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations. If a borrower claims that derogatory information is the result of extenuating circumstances, the lender must substantiate the borrower’s claim. Examples of documentation that can be used to support extenuating circumstances include documents that confirm the event (such as a copy of a divorce decree, medical reports or bills, notice of job layoff, job severance papers, etc.) and documents that illustrate factors that contributed to the borrower’s inability to resolve the problems that resulted from the event (such as a copy of insurance papers or claim settlements, property listing agreements, lease agreements, tax returns (covering the periods prior to, during, and after a loss of employment), etc.).