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Credit Event Timeline

Determined

by

Loan Type

&&

Eligibility Date

Foreclosure

Short Sale

Deed-in-lieu

Pre-Foreclosure

Chapter 7 BK

Chapter 13 BK

Conventional

Date of Loan Application

7 years

3 yrs with extenuating circumstances

Yr 3-7 = 90% LTV max

Purchase - Principle Res. only

Refi - All Occupancy Types

Eligible from date of deed transfer

Note - Foreclosures included in BK

           will follow BK wait periods.

4 years

2 yrs with extenuating circumstances

4 years

2 yrs with extenuating circumstances

2 years

from discharge date

or

4 years

from dismissal date

If Multiple Bankruptcies

5 years

If >1 BK in last 7yrs

3 yrs with extenuating circumstances from the most recent discharge or dismissal date

FHA

Date of

FHA Case Number

3 years

1 yr with extenuating circumstances

Manual Underwrite Only

​

Note - Foreclosures included in BK

           will follow BK wait periods.

3 years

Eligible if mortgage/installment payments 0x30 in 12 mo prior to short sale.

​

Wait period is not required if debtor is current and must take a job in a different market. 

2 years

1 yr from discharge date with extenuating circumstances.  (Manual Underwrite)

​

Re-established credit required

1 year

12 mo repayment history with trustee approval (Manual Underwrite)

2 years

24 mo from discharge date for automated approval eligibility

VA

Date of

Credit Approval

2 years

1 yr with extenuating circumstances

Manual Underwrite Only

​

Note - Foreclosures included in BK

           will follow BK wait periods.

2 years

May be waived with UW discretion

Eligible if mortgage/installment payments 0x30 in 12 mo prior to short sale.

 

Wait period is not required if debtor is current and must take a job in a different market. 

2 years

1 yr  with extenuating circumstances

​

Re-established credit required

1 year

12 mo repayment history with trustee approval (Manual Underwrite)

Considered re-established credit if all payments have been made

USDA

Date of

Credit Approval

3 years

1 yr with extenuating circumstances

Manual Underwrite Only

​

Note - Foreclosures included in BK

           will follow BK wait periods.

3 years

Wait period is not required if debtor is current and must take a job in a different market. 

3 years

3 yrs from discharge date with re-established credit

​

1 year with extenuating circumstances

(Manual Underwrite Only)

1 year

12 mo repayment history with trustee approval (Manual Underwrite)

(Requires GUS approval or credit exception)

What events may qualify as extenuating circumstances

Extenuating circumstances are events beyond a debtors control such as death or disability of a wage earner, medical bankruptcy, distant employment transfer, or reductions in-force, or serious long-term uninsured illness.  Such events must be documented and verified, subject to underwriting review.  Circumstances created by divorce or an inability to sell the house, etc does not qualify.

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FHA Guidelines

  • Bankruptcy – You may apply for a FHA insured loan after your bankruptcy has been discharged for TWO (2) years with a Chapter 7 Bankruptcy.  You may apply for a FHA insured loan after your bankruptcy has been discharged for ONE (1) year with a Chapter 13 Bankruptcy

  • Foreclosure – You may apply for a FHA insured loan THREE (3) years after the sale/deed transfer date.

  • Short Sale / Deed in Lieu – You may apply for a FHA insured loan THREE (3) years after the sale/deed transfer date. FHA treats short sale, deed in lieu and foreclosure as the same waiting periods.

Credit must be re-established no late payments in past 12-24 months, depending on hardship

                     Application Date must be after the above waiting period to be eligible for FHA financing after hardship.

 

VA Guidelines

  • Bankruptcy Ch 7 – You may apply for a VA guaranteed loan TWO (2) years after a chapter 7 Bankruptcy

  • Bankruptcy Ch 13 – If you have finished making all payments satisfactorily, the lender may conclude that you have reestablished satisfactory credit.

    • If you have satisfactorily made at least 12 months worth of the payments and the Trustee or the Bankruptcy Judge approves of the new credit, the lender may give favorable consideration.

  • Foreclosure / Deed in Lieu – You may apply for a VA guaranteed loan TWO (2) years after the sale/deed transfer date.

  • Short Sale – VA does not recognize a short sale as a derogatory event.  If you are able to credit qualify for a VA loan, a short sale would not prevent you from being eligible for VA financing. – Updated 4/2016

Credit must be re-established with a minimum 620 credit score

                    Application Date must be after the above waiting period to be eligible for VA financing after hardship.

 

USDA Guidelines

  • Bankruptcy – You may apply for a USDA rural loan THREE (3) years after the discharge of a Chapter 7 or 13 Bankruptcy

  • Foreclosure – You may apply for a USDA rural loan THREE (3) years after the sale/deed transfer date.

  • Short Sale / Deed in Lieu of Foreclosure – If you had big issues the deed in lieu of foreclosure will be viewed as a foreclosure and you would want to wait no less than 3 years if the score is under 640.  Scores over 640 are determined by the underwriter but typically not less than one year.

    • Mortgage debt included in Bankruptcy will go by BK discharge date, and and subsequent foreclosure will not count as an additional waiting period, as long as you are off title for any defaulted mortgages.

                    Date of Credit Approval must be after the above waiting period to be eligible for USDA financing after hardship.

​

 

Conventional (Fannie Mae) Guidelines

  • Bankruptcy – You may apply for a Conventional, Fannie Mae loan after your Chapter 7 bankruptcy has been discharged for FOUR (4) years, TWO (2) years from the discharge of a Chapter 13

  • Foreclosure – You may apply for a Conventional, Fannie Mae loan SEVEN (7) years after the sale date of your foreclosure.  Additional qualifying requirements may apply,

  • Foreclosure / Short Sale / DIL included in Bankruptcy – You may apply for a Conventional, Fannie Mae loan after a minimum FOUR (4) years from the DISCHARGE of a Chapter 7 Bankruptcy, TWO (2) years from the DISCHARGE of a Chapter 13 Bankruptcy

  • Short Sale / Deed in Lieu of Foreclosure – Short Sale or Deed in Lieu of Foreclosure not included in a Bankruptcy has a Waiting Period of FOUR (4) years from date your name is removed from title.

                    Credit must be re-established with a minimum 620 credit score.

​

 

Conventional (Freddie Mac) Guidelines

  • Bankruptcy (7,11,13) – You may apply for a Conventional, Freddie Mac loan after your Chapter 7 bankruptcy has been discharged for FOUR (4) years, or as determined by the automated underwriting system.

  • Foreclosure – You may apply for a Conventional, Freddie Mac loan SEVEN (7) years after the sale date of your foreclosure.

  • Foreclosure / Short Sale / DIL included in Bankruptcy – You may apply for a Conventional, Freddie Mac loan after a minimum FOUR (4) years from the DISCHARGE of a Chapter 7 Bankruptcy, TWO (2) years from the DISCHARGE of a Chapter 13 Bankruptcy

  • Short Sale / Deed in Lieu of Foreclosure – Short Sale or Deed in Lieu of Foreclosure not included in a Bankruptcy has a Waiting Period of FOUR (4) years from date your name is removed from title. 

                    Credit must be re-established with a minimum 620 credit score. 

Fannie Mae and Freddie Mac have reduced waiting periods in cases of extenuating circumstances

Date of Credit Report must be after the above waiting period to be eligible for Conventional financing after hardship.

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