NON-QM Mortgages After Bankruptcy and Foreclosure

In this article, we will cover and discuss qualifying for non-QM mortgages after bankruptcy and foreclosure with no waiting period requirements.  Government and conventional loans require a mandatory waiting period after bankruptcy, foreclosure, a deed in lieu of foreclosure, and a short sale.

The waiting period after bankruptcy and foreclosure depends on the individual mortgage loan program. We will go over the waiting period requirements after non-QM mortgages after bankruptcy and foreclosure versus government and conventional loans.

Non-QM Mortgages After Bankruptcy Versus Traditional Loans

Non-QM loans are alternative portfolio mortgage loan programs. Non-QM mortgages after bankruptcy is a great mortgage loan program for homebuyers who have recovered and reestablished credit after bankruptcy and/or foreclosure faster than the mandatory waiting period required on traditional mortgage loan programs.

Non-QM mortgage lenders are portfolio mortgage lenders that normally hold the loans they originate and fund in-house or sell them to private financial institutions. Traditional mortgage loans are FHA, VA, USDA, and Conventional loans. Traditional loans are loans that need to meet the agency mortgage guidelines of HUD, VA, USDA, Fannie Mae, or Freddie Mac.

Waiting Period After Bankruptcy and Foreclosure on FHA Loans

FHA loans are one of the most popular loan programs in the nation. The reason why FHA loans are the most common loan program in the United States is due to its lenient mortgage guidelines after bankruptcy, and foreclosure as well as the minimum credit standards. There is a two-year waiting period after Chapter 7 Bankruptcy to qualify for FHA loans.

There is a three-year waiting period after foreclosure, a deed in lieu of foreclosure, and a short sale to qualify for an FHA loan. You can qualify for an FHA loan one year after filing Chapter 13 Bankruptcy as long as you have met 12 timely payments and meet all HUD agency guidelines. It needs to be a manual underwrite. There is no waiting period after the Chapter 13 Bankruptcy discharge date. However, if the Chapter 13 Bankruptcy discharge is not seasoned for at least two years, it needs to be a manual underwrite.

Waiting Period After Bankruptcy and Foreclosure on VA Loans

VA loans are hands down the best mortgage loan program in the nation.  However, VA loans are only limited to active and retired veterans with a certificate of eligibility (COE). The reason why VA loans are the best mortgage loan program in the United States is due to its lenient mortgage guidelines after bankruptcy, and foreclosure as well as lenient credit standards. There are no down payment requirements on VA loans. There are no minimum credit score requirements and no maximum debt-to-income ratio caps on VA loans.

There is a two-year waiting period after Chapter 7 Bankruptcy, foreclosure, a deed in lieu of foreclosure, and a short sale to qualify for VA loans.  You can qualify for a VA loan one year after filing Chapter 13 Bankruptcy as long as you have met 12 timely payments and meet all VA agency guidelines. It needs to be a manual underwrite. There is no waiting period after the Chapter 13 Bankruptcy discharge date. However, if the Chapter 13 Bankruptcy discharge is not seasoned for at least two years, it needs to be a manual underwrite on VA loans.

Waiting Period Requirements After Bankruptcy and Foreclosure on USDA Loans

You can qualify for USDA loans after a three-year waiting period after bankruptcy, foreclosure, a deed in lieu of foreclosure, and a short sale. There are no down payment requirements on USDA loans. You can only purchase a home that has been designated in a rural area by the USDA.

There is a maximum income restriction on USDA loans on household income. The maximum debt-to-income ratio on USDA loans is you cannot have the front-end debt-to-income ratio greater than 29% and the back-end debt to income ratio cannot be greater than 41%.

Fannie Mae and Freddie Mac Waiting Period Guidelines After Bankruptcy and Foreclosure on Conventional Loans 

There is a four-year waiting period after bankruptcy, a deed in lieu of foreclosure, and a short sale to qualify for conventional loans. There is a seven-year waiting period after a standard foreclosure to qualify for conventional loans.

There is a two-year waiting period after the Chapter 13 Bankruptcy discharge date and a four-year waiting period after the Chapter 13 dismissal date to qualify for conventional loans.

Non-QM Mortgages After Bankruptcy and Foreclosure Waiting Period Requirements

There are no waiting period requirements after bankruptcy, foreclosure, a deed in lieu of foreclosure, or short sale on non-QM mortgages after bankruptcy and foreclosure. However, there is a 30% down payment requirement on non-QM loans one day out of foreclosure and bankruptcy. The down payment requirements lessen as the bankruptcy and foreclosure ages. For example, if the bankruptcy and foreclosure are over two years old, then the down payment requirement on non-QM mortgages after bankruptcy and foreclosure requires a 20% down payment.

The team at Non-QM Mortgage Brokers are experts in helping borrowers with non-QM mortgages after bankruptcy and foreclosure. To learn more about qualifying for non-QM mortgages after bankruptcy and foreclosure, please contact us at Non-QM Mortgage Brokers at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Non-QM Mortgage Brokers is available 7 days a week, on evenings, weekends, and holidays.