Arlington Real Estate, Life after Bankruptcy, Foreclosure, Shortsale

Questions about Bankruptcy

– Dealing with a Bankruptcy, Foreclosure or a Short Sale in your past and you want to buy a home??

– Is there any Hope and how long do you need to wait?

                                        – Here is what you need to know!

We receive many phone inquiries regarding purchasing a home after a bankruptcy, foreclosure or short sale. So we presented these questions to Michelle  and Earl Schmidt with Cobalt Mortgage, and here are their responses.


If I have a Chapter 7 Bankruptcy on my credit how long do I need to wait to buy a home?


• Conventional financing with a minimum 5% down – 4 years from the discharge date

• FHA minimum 3.5% down – 2 years from discharge date

• USDA 0% down – 3 years from discharge date

• VA 0% down – 2 years from discharge date

If you included a mortgage loan in your Bankruptcy and did not reaffirm the debt, more than likely it went back to the bank and you have a Foreclosure as well. See below for additional criteria if this took place.

paid-off-debt  Question: What if I have a Chapter 13 Bankruptcy on my credit report?

 Answer:• Conventional with a minimum of 5% down – 2 years from discharge date and 4 years from dismissal date.

                                                           •   FHA, USDA and VA – 12 months acceptable payment history to trustee and trustee/court approval before you can take on a new mortgage debt.


I had to Short Sale my home, now what? How long before I can buy another home??


• Conventional – 2 years with 20% down, 4 years with 10% down and 7 years with less than 10% down.

• FHA and USDA – 3 years from final Short Sale completion/recording of sale.

• VA – 2 years from final Short Sale recording.


I lost my home through a Foreclosure; can I ever get another mortgage loan?

Answer: YES, depending on the new loan type and the amount of time that has elapsed.

• Conventional – 7 years from completion of the trustee sale

• FHA and USDA – 3 years from Trustee sale

• VA – 3 years from Trustee sale

** For all of the above situations be prepared to provide your complete Bankruptcy papers and final Escrow Closing paper work for the Short Sale or Foreclosure. **

** FHA allows for extenuating circumstances, with new guidelines for anyone who lost their home to a short sale or foreclosure as a result of a job loss or reduced pay. Call to find out if you qualify for this program.

For more information, please contact:

michelle for webMichelle Schmidt



earl for webEarl Schmidt