While it is true, bad things happen to good people, the Federal Housing Administration (FHA) the most relaxed time frames when it comes to purchasing or refinancing after a foreclosure or bankruptcy.  FHA has a very defined amount of time you must wait before entering an FHA after a bankruptcy or foreclosure.

The short answer is “yes,” but how long will you have to wait to get an FHA loan after these derogatory events?

Getting an FHA loan after a Chapter 13 Bankruptcy

The standard waiting period is two years from the discharge date of a Chapter 13 bankruptcy.  However, a borrower can obtain financing while in a Chapter 13 if the borrower can:

• At least one year has elapsed in the Chapter 13 pay-out period
• Borrower can provide proof of 12 months timely payments
• Borrower receives written bankruptcy court permission

Getting an FHA loan after a Chapter 7 Bankruptcy

The standard waiting period is three years from the discharge date of a Chapter 7 bankruptcy.  However, a borrower can shorten this time period to less than two years but not less than one year if the bankruptcy was caused by extenuating circumstances beyond their control AND the borrower has proven the ability to manager his/her financing affairs in a responsible manner. 

Getting an FHA loan after a Foreclosure

The standard waiting period is three years from the property foreclosure date or deed-in-lieu of foreclosure.  However, a borrower can shorten this time period if the foreclosure was caused by extenuating circumstances beyond their control, such as illness or death of a wage earner. 

Getting an FHA loan after a Short Sale

There are two very separate and distinct situations when trying to obtain an FHA loan after a Short-Sale:

• Were you current Short Sale for the past 12 months?  If the answer is “yes” than you are immediately able to obtain FHA financing
• If you were delinquent or in default at the time of Short Sale than the standard waiting period of three years must be used You will need to document that you are not trying to take advantage of declining market conditions and you were not attempting to purchase a similar/superior property within a reasonable commuting distance at a reduced price as compared to the current market value.