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Profile picture for bostonitalian2001

FHA Loan after Chapter 13 - any bank recommendations?

I'll be completing my ch 13 after five long years of on time payments to the trustee and my current mortgage bank. I'd like to start the process of selling my current home and searching for a new home this summer when I anticipate my discharge papers but I don't want to sell unless I was certain I could get a new loan. 

I've spoken with three local FHA banks and all of them have said they don't do manual underwriting. Can anyone tell me a bank that they've used and they've been successful in getting an FHA loan after or even during a chapter 13? The guidelines seem to allow for an FHA after one year of on time payments to the trustee with the trustee's permission - I've now made almost five years worth of payments (on time). 

Some other relevant info: 
Current fico is a low of 660 to a high of 699
Income is around 160k
would put 10-20 percent down
purchase of a single family
kept home and student loans outside of the chapter 13 and paid all on time

Thanks

  • January 26 2014 - Boston
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Answers (7)

Best Answer

You should check out mortgage companies and not just banks alone. Mortgage companies can have a lot to offer and at most times can be more flexible than your traditional bank. You are correct that you can obtain an FHA loan 1 year after the bankruptcy as long as you have made on time payments along with approval from the court. Also, it seems that your finances look good so far. The best thing for you to do is to speak with a lender such as myself to see if you can get started on financing a new home. If you have any further questions or if you would like a loan, feel free to contact me.

Good Luck!
  • January 27 2014
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As others have mentioned this should be a straight forward FHA scenario that you qualify for and if you are close to your discharge it will be easier to wait for your discharge, his way you can avoid requirement for court permission, the only court involvement if any will be verification of your timely history from the trustee. Look for a bank/lender to do a full blown TBD approval for you to avoid any possibility of problems later on. With manual underwrite often there will be requirement for reestablished credit so hopefully you have some of those references on your credit report for accounts that were either left out of the bankruptcy or created after it's filing.
  • January 26 2014
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Profile picture for bostonitalian2001
Thanks for the info. I did manage to reach one regular bank today and they are confirming it shouldn't be an issue for them to do the FHA soon. Thanks again.
  • January 26 2014
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Profile picture for Arizona Mortgage Pro
Hi bostonitalian, 

I'm surprised you are having trouble finding someone for this loan. The lender I work for would jump at the chance to finance this based on the info provided. Try reaching out to a local mortgage professional from the directory here on Zillow. Most banks and lenders will manually underwrite a file, so you may have just had bad luck with the ones you have contacted thus far. 

Best of luck!
  • January 26 2014
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You qualify now if you have paid your BK on time for the previous 12 months with FHA. What you need is a Federally Chartered National Bank that also offers Broker FHA financing. This allows you to get a single credit inquiry but gain access to every FHA program available from the top banks and lenders in the country. You work with a single loan officer and they are able to not only offer you FHA financing but get competitive rates and fees and not just get it done. You have choices if you choose the right lender. I would be happy to answer any questions or speak with you personally. 
  • January 26 2014
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Profile picture for bostonitalian2001
Thanks for the response. My understanding is that it is 12 months from the date of filing with all payments made on time to the trustee. Assuming the BK is discharged after 60 months successfully then it should be even easier right? I've made all payments on time and after the discharge I would no longer require approval from the courts. 
  • January 26 2014
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FYI, when considering purchase or refinance a home specially when you have a Chapter 13, the minimum waiting period is12 months. That of course is with proof no missed payment and the blessing from the Court Trustee. Having said that, we offer manual underwriting and it appears by your list, you should be a perfect candidate for a new home loan. If you received 3 negative answers, it because you're looking at Banks. We are a mortgage lender and if I were you I would look there or with a mortgage broker. Banks and Credit Unions are traditionally more strict.

Best of Luck!
  • January 26 2014
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