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Getting a mortgage while in a Chapter 13 Bankruptcy

Hello--are there any lenders who work with people in active Chapter 13 bankruptcies? We are coming up on a year, haven't missed any trustee payments, but are getting killed in rent.  Thanks!
  • March 12 2014 - Alexandria
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Answers (3)

As long as you have rebuilt your credit and have sat through an appropriate amount of time it is possible to obtain a loan during chapter 13 bankruptcy. You can obtain an FHA loan during a Chapter 13 bankruptcy as long as you have made 12 months of satisfactory Chapter 13 plan payments, but you must have bankruptcy court approval to get the loan. You must also provide an explanation of the bankruptcy. Conventional loans have the longest waiting periods. If you want a conventional loan, you must wait two years after receiving a Chapter 13 discharge. If your Chapter 13 case was dismissed without a discharge, you must wait four years from the date of the dismissal. If you would really like a mortgage there are also hard money loan options that you can consider. Either way, the best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!
  • March 12 2014
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Profile picture for GMerino
For a chapter 13:

You would be eligible subject to the following:
Evidence borrower is at least 12 months into payment plan
Evidence of payment amount and that all payments have been made on time
Evidence of court permission to enter into mortgage

This would be for an FHA home loan.  So 3.5% down and there are other factors that would come into play such as re-established credit, income, assets, etc.
  • March 12 2014
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Pretty much any lender who originates FHA loans will be able to help you with this once you have made 12 payments on time and receive authorization from the trustee to go ahead and buy a home.
  • March 12 2014
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