Home » Blog » Waiting Period » 2018 When Can I Qualify for a Mortgage After Bankruptcy, Short Sale, Foreclosure or DIL
Waiting Periods for buying after bankruptcy foreclosure short sale deed in lieu

2018 When Can I Qualify for a Mortgage After Bankruptcy, Short Sale, Foreclosure or DIL

Qualifying for a mortgage after financial hardship is normally only a matter meeting a minimum waiting period.

The waiting period is determined by the nature of the financial hardship and the type of mortgage your are applying for.

Most people today were either directly affected, or know someone that was directly affected by financial hardship resulting in a bankruptcy, foreclosure, deed in lieu or short sale in the past 5 to 7 years.

Find the Right Lender. Find the Right Loan. Get Help Now!

Often, a bankruptcy is followed by the default of a mortgage, and the loss of a home to foreclosure, short sale or deed in lieu.

It can get tricky knowing which waiting period apply and how to figure out the shortest waiting period possible.  This is a very popular subject as you can see if you scroll to the bottom of this article and see over 2,000 questions and answers dating back to early 2011.


FMWH Live Podcast: When Can I Buy After a Financial Hardship?

Find the Right Lender. Find the Right Loan. Get Help Now!

Expert Interview – Meet Josh Lewis

Posted by FindMyWayHome.com on Thursday, August 31, 2017

I am joined by Josh Lewis of BuyWise Mortgage as we discuss  the waiting period, and common mistakes that lenders make when talking to people that have had financial hardships in the past.

Click Here for Show Notes and Valuable Links


2018 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

Find the Right Lender. Find the Right Loan. Get Help Now!

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

2018 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

Find the Right Lender. Find the Right Loan. Get Help Now!

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

2018 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.  Over 640 your UW will make the call but typically not less than one year.
  • UPDATED 12/2014 – 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.
  • Link to 12/1/2014 USDA Guideline – HB-1-3555  Attachment 10-B  See Page 31 of 34

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

Find the Right Lender. Find the Right Loan. Get Help Now!

2018 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 – UPDATED – Effective 7/29/2014:  Short Sale or Deed in Lieu of Foreclosure not included in a Bankruptcy has a new 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.

Find the Right Lender. Find the Right Loan. Get Help Now!

2018 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 Loan Products Advisor (AUS)

  • Foreclosure – You may apply for a Conventional, Freddie Mac loan SEVEN (7) years after the sale date of your foreclosure or as determined by Loan Products Advisor (AUS)
  • Foreclosure / Short Sale / DIL included in Bankruptcy – You may apply for a Conventional, Freddie Mac loan after a minimum FOUR (4) years after the sale date of your foreclosure or as determined by Loan Products Advisor (AUS)
  • Short Sale / Deed in Lieu of Foreclosure –
  • You may apply for a Conventional, Freddie Mac loan FOUR (4) years after the sale date of your foreclosure or as determined by Loan Products Advisor (AUS)

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.

NOTE:  I do not yet have a success story for someone qualifying for the reduced time frames that Freddie Mac proposes to offer.  That shouldn’t stop you from trying.

2018 Jumbo Mortgage Guidelines

  • Bankruptcy – You may apply for a Jumbo mortgage loan once any chapter of bankruptcy has been discharged for FOUR (4) years, FIVE (5) years if multiple bankruptcy occurs on credit profile.
  • Foreclosure – You may apply for a Jumbo mortgage loan SEVEN (7) years after the sale date of your foreclosure.  Additional qualifying requirements may apply,
  • Short Sale / Deed in Lieu of Foreclosure – You may apply for a Jumbo mortgage loan:
    • SEVEN (7) Years from Short Sale or Deed in Lieu of Foreclosure with Maximum 80% Loan to Value
    • NOTE: There are investors out there that will allow you to buy again in FOUR (4) years after a short sale, but expect higher rates, higher fees, and possibly larger down payment requirement.  Jumbo lenders have not yet loosened up the qualifying guidelines for buying after a hardship.
    • It may make financial sense to consider a portfolio Jumbo lender that offer high rates, so that you can take advantage of today’s market.  Once your short sale is seasoned, refinance into a more favorable, longer term loan.

NOTE:  If hardship is the result of an extenuating circumstance, waiting periods may be reduced.  Contact lender for details.

Portfolio Loans

We are beginning to see more and more portfolio loans in the market that have relaxed waiting periods for bankruptcy, foreclosure, short sale and deed in lieu of foreclosure.  These are not necessarily subprime loans, but they do often have higher interest rates, and higher closing costs.

Portfolio loans are offered by investors that are looking at other compensating factors, like high credit scores, low loan to value (larger down payments), and reserves.

Do not rule out a portfolio loan as a “bridge” to get you into your home until you reach your waiting period for refinancing into a loan with better terms.


NOTE:  This page was first created in February, 2011, and is updated as new guidelines are released.

This page is monitored by Boomerang Buyer experts that understand the guidelines, and have successfully guided countless families back into homeownership after significant financial hardship.

About Your Expert

Scott Schang

As a 19 year veteran of the Mortgage and Real Estate industry, I am passionate about educating and empowering consumers. I have been writing about consumer protection issues, and making sense of complicated real estate and mortgage topics on this website since 2007

Leave a Question or Comment About this Topic

  • Divorcee Blessed says:

    I had a short sale which was included in my chapter 7 bankruptcy back in Oct 2016. I was told by Quicken Loans that I would qualify for FHA in Oct 2018. Is this true?

    • Unfortunately, this company does not hire experienced loan professionals, and this type of answer is very, very common….and very, very, wrong.

      The person in the call center that you spoke to is confusing a couple of different waiting periods. Yes, you can use FHA 2 years from a Bankruptcy (Chapter 7) discharge, but the Short Sale is considered a completely separate event that requires a 3 year waiting period.

      Conventional financing will allow you to buy in 4 years from the discharge of a Bankruptcy, and ignore the Short Sale date as long as the mortgage was discharged in the bankruptcy, and the short sale happened after the discharge of the bankruptcy.

      If you would like speak to a professional loan officer that has experience with these guidelines, I’m happy to make an introduction. You can either click the “Questions” email above, or email directly at Scott@findmywayhome.com.

      Hope this helps?

  • April Kostopoulos says:

    We purchased our owner occupied home in 12/07. In 2012 we filed a ch. 7 and it was dismissed 12/12 ( 5 yrs currently) Our interest rate is adjusting and we need to refinance now. Credit score is around 680. Can you suggest lenders in california who could assist? Would love to keep our interest only option Arm.

    • Hi April,

      Yes, I have a very smart, very experienced loan officer in CA that can help. I have asked Josh Lewis to reach out to you by email to help you explore your options.

      There are no option Arm loans available anymore unless you are eligible for a Reverse Mortgage. There may be interest only options available, but they are not as competitive as they used to be when you got your original loan.

      Josh is a California broker with over 25 years experience. He’s excellent at out of the box solutions. I’m confident that he can get you pointed in the right direction.

      Hope this helps?

  • Diane says:

    Hi Scott, I filed for BK in 2009 it was discharged in 2013. Included in the BK was a property. The property was foreclosed in 2017. I was under contract with a lender to purchase a property got inspection and appraisal, but decided to pull out due to all the issue with the property. I started my search again and the lender told me there was a problem with the foreclosure. The mortgage was with Chase, but months after the discharge it was sold to round point mortgage. I was told due to round point buying the mortgage and sending me info that they were the new owners of loan my foreclosure waiting period had changed. So I was told I could not get a conventional loan at this time. I explained to them I did not contact them because I didn’t even know chase had sold the mortgage to them they sent me certified letters notifying me. What can I do at this point or do I still have to wait.

    • Hi Diane,

      What you’re describing is that maybe Chase sent you a “Notice of Default?”. If Chase foreclosed, there would be no mortgage that could be sold to round point. There’s something missing here that your lender should have been able to explain.

      Either the home was foreclosed, and there would be no mortgage, or the home did not foreclose, which means you were never eligible to buy in the first place.

      This shouldn’t be that difficult to figure out. If you would like to shoot me an email to scott@findmywayhome.com, I’ll do as much as I can help you sort this out, and if we need an lender that has experience with these guidelines, I can point you in the right direction for that too.

      Either way, we’ll get to the bottom of this, and you’ll know exactly what your options are.

      Hope this helps?

  • Cel says:

    Hi, how do I fin out wf at type of loan I had? I’m getting different i formation on my eligibility to buy with husband using VA. I don’t recall having as PM I.

    • Your lender can look up the loan in the CAIVRS system, that will tell you if it was a FHA mortgage.

      If you could give me more details about your situation, I can introduce you to someone that can help.

      Shoot me an email to scott@findmywayhome.com. When did you lose the home? Was it a foreclosure, short sale or deed in lieu? Was there a bankruptcy? And finally, what State are you buying in.

      I look forward to helping you take advantage of your VA benefits!

      Hope this helps?

  • liz king says:

    Hi Scott,
    I am 4 years out from an FHA foreclosure due to divorce and looking to purchase again on my own. My credit is sitting at 650 and I plan to put 20% down but, I still have 2 items from the divorce I need to clear up. Will I be eligible for another FHA loan or will I have to seek another route?

    • Hi Liz,

      If the foreclosure was a FHA loan, then your 3 year waiting period begins from the date that the mortgage insurance claim is paid to the foreclosing lender. My experience is that this delays the “start” of the waiting period by several months. This date is not accessible to the general public, so the lender will have to look it up on the CAIVRS system, which tracks this stuff.

      I would be happy to introduce you to an experience lender that understands these guidelines, just shoot me an email to scott@findmywayhome.com and let me know what State you’re in?

      Last thought…was the mortgage included in a bankruptcy by any chance? If so, that may bring conventional financing into the picture, which will allow you to avoid the mortgage insurance with FHA.

      Hope this helps?

  • Linda Ingersoll says:

    Hi, I am wondering if I can refi conventional with a 10/14 foreclosure date on my credit report. I did not receive any paperwork and worked with the lender to bring the account current. I am not able to get resolution with the lender or credit bureau to remove from my report. What are the chances I can get a conventional refinance at this time? thanks in advance!

    • Hi Linda,

      It sounds like you had a Notice of Default recorded in 10/14, but the home was never foreclosed? Is the message on the credit report say “foreclosure started”? If that is the case, then you would be eligible for conventional financing. I can help you find a lender that has experience with these guidelines.

      Shoot me an email to scott@findmywayhome.com, let me know what State you’re in, and I can make an introduction.

      Hope this helps?

  • >