Having a bankruptcy in your financial history can also affect your credit score. The good news is the FHA loan program can still help you buy a home after bankruptcy and it can be easier to get an FHA loan after bankruptcy compared to a conventional loan. The requirements are different depending on the type of bankruptcy: If you’ve filed and been discharged from Chapter 7 bankruptcy, you can still apply for an FHA loan under specific conditions. If two or more years has passed since your bankruptcy has been discharged and you have “reestablished good credit” or have not incurred new credit obligations, you can apply for an FHA loan. You will still need to meet the lender’s other credit, financial, and income requirements to be approved. You can still apply for an FHA loan after Chapter 7 bankruptcy if more than 1, but less than 2 years have passed, although you will need to meet additional requirements. These include demonstrating that the bankruptcy was caused by circumstances out of your control and providing recent documentation of your ability to responsibly maintain your finances.
Since Chapter 13 bankruptcies involve a repayment plan, some borrowers may be eligible for an FHA loan before the repayment plan is complete. If a year has passed and you have made all payments in full and on time, you can apply for an FHA loan. This may require written documentation from the bankruptcy court with their approval. Just like Chapter 7 bankruptcy, you will still need to meet your lender’s credit, financial and income standards in order to be approved.