Minimum Credit Score and Requirements After Bankruptcy Foreclosure or Short Sale

Mortgage loan standards required by FHA, Conventional, and VA underwriting required after a bankruptcy, foreclosure, or short-sale with regard to seasoning after discharge and general credit score standards for FHA, Conventional, and VA lending.

FHA Ch 7 BK……must wait at least 2yr’s from discharge before you can apply for an FHA loan.

FHA CH 13 BK….after you have completed this type of bankruptcy you must have no lates on your credit report in the past 12 months and reestablished new credit

FHA and Conventional after Foreclosure or Short Sale….both FHA and Conventional view a short sale and foreclosure as the same and although a short sale is a better option for the general use of credit, the lending guidelines for a short sale vs a foreclosure are the same with respect to how long each program requires a borrower to wait before they can apply for a new loan…On FHA you  must wait a minimum of 3 years before you can apply for a mortgage loan after a Foreclosure or Short Sale

Conventional after Ch 7 BK….your bankruptcy much be 4 years out of discharge or dismissal before you can apply for a new mortgage loan

Conventional after Ch 13 BK… 2yr’s after discharge date or 4yr’s from dismissal date before you can apply for a new mortgage loan

Conventional with a Foreclosure and Short Sale…they are very complicated………with few considerations, Conventional may require 5yr’s from the completion date but in most cases, it will go as far out as 7yr’s depending on FICO or credit score and how much down payment you have to put down

All FHA loans will require a minimum credit score of  640 with the exceptions of the Bond programs. Bond programs still require a minimum credit score of 620.

VA purchase loans still require a minimum credit score of 620.

For specific details to your qualification or ability to apply for a loan, call me, Your Frisco Mortgage Guy For Life.

Comments

  1. Pete says

    We were just told that we’d need 20% down on an FHA loan?! 4 1/2 yrs post bankruptcy ch 7, 3 yrs 1 week since foreclosure, credit score 660 with open lines of credit/no late payments. Is this true??

  2. says

    Pete,
    There is nothing in FHA that ever requires you put down more money for such a thing. You have reached seasoning on both the BK and the Foreclosure. As long as your income is qualifiable, it sounds to me like you should be good to go at 3.5% down right now. Check out this post I wrote about those times: http://www.yourmortgageguyforlife.com/2011/01/04/696/ Let me know if you need me to pre-approve you for free ok? You can email me directly at Brad@YourMortgageGuyForLife.com
    Brad Lynch

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