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Can I purchase a home while in process of a Chapter 13?

by PrestonS485 from Shallowater, Texas. Nov 19th 2015 Reply


William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,795 contributions

Yes and no.. FHA, VA, & USDA Guidelines do allow you to purchase after 1 year so long as you meet certain guidelines.. To purchase a home while in a BK13, you first need permission from the trustee.. also, you must have made 12 months on time payments to the trustee. You will need to meet all other eligibility requirements such as minimum acceptable credit scores, sufficient income, debt to income ratios within the acceptable range, etc. Understand that this is in regards to the conforming guidelines. But FHA, VA & USDA do not lend money.. these government programs says that if a borrower meets these minimum guidelines, then the government will guarantee the loan against default (not lend money).. Each lender who offers financing can have their own set of rules/guidelines above what the government calls for.. It's these "Overlays" that make lending rules different from one lender to the next.. so even though the guidelines say you can purchase after 1 year, most lender will require 2 or more years before they will do a loan for you.. that being said, there are lenders who will do a borrower 1 year into a BK13.. because of the varying guidelines, I suggest you contact a LOCAL mortgage broker and apply with them. Once they see your complete loan profile, they will be better equipped to advise you properly. Also, by applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with many lenders with each one offering a different type of lending program. This is unlike the local bank which typically only has a few lending programs. The more lenders, the more lending options, and the more likely your scenario will be accepted.. Plus, the broker is experienced in seeking out the best loan terms for your particular scenario, and he has lower overhead which typically results in lower rates and fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Nov 19th 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,439 contributions

YES, FHA allows this as long as all your Chapter 13 payments have been made on time, and as long as you get permission from your bankruptcy trustee.

Nov 19th 2015
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Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,106 contributions

Yes, as long as 12 months of the pay-out period under the bankruptcy has elapsed and the payment performance has been satisfactory with all required payments made on time, you will also need to receive written permission from the bankruptcy court to enter into the mortgage loan. This is a pretty common loan for FHA and VA. This will also depend on your complete credit, income, debt, work history etc. I suggest speaking with a local loan officer or two and see what our available options are. Best wishes, Sean

Nov 21st 2015
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Mark Hemingway (SFSLend)
#1 ranked lender in Colorado - 533 contributions

It is very possible to do so and as long as you have not missed any Chapter 13 payments. You should speak to a mortgage professional though so you can have your credit checked to ensure you meeting the other requirements of obtaining a loan.

Dec 1st 2015
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