FHA Bankruptcy criteria for FHA loan approvals state that if you have been discharged from a Chapter 7 bankruptcy for two years or more, you are eligible to apply for an FHA mortgage. If you are in a Chapter 13 bankruptcy and have made all court approved payments on time and as agreed for at least one year, you are also eligible to make an FHA loan application.
The borrower also must have demonstrated a documented ability to responsibly manage his or her financial affairs. An elapsed period of less than two years, but not less than 12 months, may be acceptable if the borrower can show that the bankruptcy was caused by extenuating circumstances beyond his or her control and has since exhibited a documented ability to manage his or her financial affairs in a responsible manner.
Additionally, the lender must document that the borrower’s current situation indicates that the events that led to the bankruptcy are not likely to recur.
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* FHA requirements new borrowers will now be required to have a minimum credit score of 580 to qualify for 3.5% down payment
* FHA loan requirements new borrowers with less than a 580 credit score will be required to put down at least 10%
Requires a minimum credit score of 500 to buy a home or refinance
A collection is minor in nature usually does not need to be paid off as a condition for loan approval
Chapter 7 Bankruptcy at least two years must have elapsed since the discharge date
Foreclosure must have been resolved for at least 3 years
Government loan: Seasoning is determined by the date the claim was paid
Loans other than Government: Seasoning is determined by the date of sale the lender sold the property
FHA guidelines requires three year past from the date of sale of the property