Filing for bankruptcy is a way to erase certain types of debt and stop creditors from harassing you. It’s unfortunate when it happens, but it’s often necessary for saving your financial future.
People often wonder if they can fully recover to the point of buying another home. Even though a bankruptcy will stay on your credit history for a minimum of ten years, it’s still possible to buy another home again (and thankfully, within that time frame).
Depending if you have filed for a Chapter 7 or Chapter 13 bankruptcy, you must wait a certain period of time before you can get financed again. Each of the major loan financers, including the FHA, USDA, and the VA each have their own guidelines:
- FHA loans: 2 Years
- VA home loans: 2 Years
- USDA loans: 3 Years
- Conventional loans: 4 Years
As you can see, 2-4 years is a typical wait time, but there are some exceptions. The FHA offers a “Back to Work” program that allows you to buy again after only one year, for instance. Other special exceptions will be made if the bankruptcy was due to circumstances beyond your control, such as a medical emergency.
Keep in mind that after the waiting season to purchase another home, you must still quality for all of the other aspects of the loan and meet a lender’s minimum requirements. So if your credit score does not meet their standards, there’s still a possibility of being rejected.
Once you feel ready to be a homeowner again, be sure your credit report is accurate and up to date to prevent any future issues. Repairing your credit is a big factor in being able to qualify again. It does take some financial planning and saving, but purchasing again is still very much possible!