Fannie Mae Mortgage Included In Bankruptcy Guidelines

1. Fannie Mae Mortgage Included In Bankruptcy Guidelines

* BANKRUPTCY AND FORECLOSURES

* If you file for a Chapter 7 bankruptcy and it is discharged, mortgage applicants need to meet mandatory waiting period on government and conventional loans.

* Here are the mandatory waiting periods after bankruptcy to qualify for home loans:

* HUD requires 2 year mandatory waiting period after Chapter 7 Bankruptcy discharged date

- Borrowers can qualify for FHA Loans one year into a Chapter 13 Bankruptcy Repayment Plan
- Need Trustee Approval
- Chapter 13 does not have to be discharged to qualify for FHA Loans
- Needs to be manual underwriting

* VA requires 2 year mandatory waiting period after Chapter 7 Bankruptcy

- VA Guidelines on Chapter 13 is exactly the same as FHA
- Borrowers can qualify for VA Loans after 12 payments into Chapter 13 Repayment
- Need Trustee Approval
- There is no wait period after Chapter 13 discharged date to qualify for VA Home Loans

* Fannie Mae and Freddie Mac Requires 4 year waiting period to qualify for conventional loans after Chapter 7 Bankruptcy

- 2 year wait period after Chapter 13 discharged date
- 4 years after Chapter 13 dismissal date

* USDA requires a three year waiting period after bankruptcy, foreclosure, deed in lieu, short sale

2. Other Benefits With Conventional Versus FHA Loans

* Besides the benefits of Fannie Mae Mortgage Included In Bankruptcy Guidelines, there are other reasons why borrowers may need to go with Conventional versus FHA Loans.

- Income-Based Repayment (IBR) is allowed with Conventional but not FHA Loans
- There are many home buyers with large student loan balances
- FHA requires 1.0% of outstanding student loan balance to be used a borrower’s hypothetical debt on DTI Calculations
- IBR Payments are not allowed
- However, Fannie Mae and Freddie Mac allows IBR student loan payments as long as it reports on all three credit bureaus

Homebuyers or homeowners who need a direct lender with no overlays on government and/or conventional loans, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. We are available 7 days a week, evenings, weekends, and holidays.

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