FHA loans allows refinance or purchase after bankruptcy. In fact, even if you have had credit problems, such as a bankruptcy, it's easier for you to qualify for an FHA loan.
Chapter 7 Bankruptcy
At least two years must have elapsed since the discharge date of the
borrower and / or spouse's Chapter 7 Bankruptcy, according to FHA
guidelines. This is not to be confused with the bankruptcy filing date.
A full explanation will be required with the loan application. In order
to qualify for an FHA loan, the borrower must qualify financially, have
re-established good credit, and have a stable job.
Chapter 13 Bankruptcy
FHA will consider approving a borrower who is still paying on a Chapter 13 Bankruptcy if those payments have been satisfactorily made and verified for a period of one year. The court trustee's written approval will also be needed in order to proceed with the loan. The borrower will have to give a full explanation of the bankruptcy with the loan application and must also have re-established good credit, qualify financially and have good job stability.
FHA Bankruptcy Guidelines 2013
A perfect credit
score is not needed for an FHA loan approval. In fact, even if you have
had credit problems, such as a bankruptcy, it's easier for you to
qualify for an FHA loan than a for a conventional loan. Sometimes scores
down to 530 are accepted if there are compensating factors that offset
the credit risk.
What documentation will I need?
• Personal tax returns for the past 2 years
• Current pay stubs for the past month
• Bank statements for last 2 months (all pages)
• Latest retirement statement for each active account (all pages)
• Sales contract (purchase)
• Clear copy of Driver’s License (front and back)
• Clear copy of SS card (front and back)
• Addresses and loan information of other real estate owned (if any)