If you filed for Chapter 13 bankruptcy or were recently discharged, you might wonder whether you qualify for a mortgage.
The good news is securing a mortgage after Chapter 13 bankruptcy is generally easier than Chapter 7. In fact, buying a house while in Chapter 13 bankruptcy is possible. Government-backed FHA, VA, and USDA loans let you apply for a mortgage as early as one year into your repayment plan.
However, it’s crucial to make all your payments on time and meet the lender’s requirements. If you do, you’ll likely have a strong chance of buying a house in Chapter 13 or shortly after discharge. Check your mortgage eligibility. Start here (Jan 18th, 2025)
It’s definitely possible to buy a house after Chapter 13 bankruptcy. In fact, some mortgage lenders that work with Chapter 13 may approve your loan application even while you’re still in the repayment plan.
Most lenders are easier on applicants who file for Chapter 13 than those who file for Chapter 7 bankruptcy. That’s because Chapter 13 filers have made an effort to repay at least some part of their unsecured debts, including credit cards and medical bills.Check your mortgage eligibility. Start here (Jan 18th, 2025)
This is reflected in the minimum waiting period to get a loan after each type of bankruptcy:
Of course, you’ll still have some extra hurdles to clear when buying a house while in Chapter 13 bankruptcy. A mortgage lender will want to see you’ve taken meaningful steps to improve your credit and manage your debt before approving your home loan.
The requirements for buying a house while or after Chapter 13 depend on the type of mortgage you hope to use. Government-backed loans are more lenient about Chapter 13 on your credit report, while conforming loans (backed by Fannie Mae and Freddie Mac) impose longer waiting periods.
The time frame for purchasing a house after Chapter 13 hinges on both your loan program and the stage of your bankruptcy filing.
If you’re using an FHA, VA, or USDA loan, you can apply for a mortgage as soon as 1 year after filing for Chapter 13 bankruptcy, and there’s no waiting period after being discharged.
Conventional loans, however, will not approve you while in Chapter 13 and require a two-year waiting period after discharge.Check your mortgage eligibility. Start here (Jan 18th, 2025)
| Chapter 13 Status | Mortgage Loan Program | Waiting Period |
| Filed | FHA, VA, USDA | 12 months |
| Filed | Conventional | Not allowed* |
| Discharged | FHA, VA, USDA | None |
| Discharged | Conventional | Two years |
| Dismissed | FHA, VA, USDA | 12 months |
| Dismissed | Conventional | Four years |
| Dismissed with extenuating circumstances | Conventional | Two years |
*Freddie Mac and Fannie Mae will not allow buyers to purchase a home with a conventional loan until after Chapter 13 bankruptcy has been discharged or dismissed.
Keep in mind that mortgage companies are allowed to set their own approval guidelines beyond those listed above. “Some lenders will require longer periods before you are able to get a loan,” cautions Jon Meyer, The Mortgage Reports loan expert.
If an underwriter denies your application, don’t be discouraged. It’s worth trying another mortgage lender, as you might have more success with one that understands the nuances of buying a house after Chapter 13. Working with a mortgage broker who specializes in assisting homebuyers who have declared bankruptcy can also make the process smoother and increase your chances of approval.
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