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Chapter 7 Dismissed and Discharged
What’s the difference between chapter 7 Discharge and Dismissed when it comes to the waiting period to qualify for a mortgage?
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1 Reply
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That is a great question. You can qualify for GOVERNMENT backed loans after Chapter 7 Bankruptcy discharge as follows:
- Two years after discharge date of Chapter 7 bankruptcy on FHA and VA loans
- Three years after discharge date of Chapter 7 bankruptcy on USDA loans
- Four years after Chapter 7 Bankruptcy discharge date on conventional loans
The waiting period after a Chapter 7 bankruptcy dismissal date varies depending on the type of loan you are seeking (FHA, VA, USDA, or conventional) and whether the bankruptcy was discharged or dismissed. Here are the general guidelines for each type of loan:
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FHA Loan:
- If the Chapter 7 bankruptcy was discharged, you typically need to wait at least two years from the discharge date to be eligible for an FHA loan.
- If the Chapter 7 bankruptcy was dismissed, the waiting period may be longer, and you may need to wait at least one year from the dismissal date and have reestablished good credit.
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VA Loan:
- For a VA loan, there is typically a two-year waiting period after the discharge date of a Chapter 7 bankruptcy.
- If the bankruptcy was dismissed, the waiting period may be shorter, but you’ll still need to demonstrate responsible credit behavior.
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USDA Loan:
- USDA loans typically require a waiting period of three years from the discharge date of a Chapter 7 bankruptcy.
- If the bankruptcy was dismissed, you may be eligible for a USDA loan after one year, but you’ll need to have reestablished good credit.
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Conventional Loan:
- Conventional loans backed by Fannie Mae or Freddie Mac often have a waiting period of four years from the discharge date of a Chapter 7 bankruptcy.
- If the bankruptcy was dismissed, the waiting period may be longer, and you’ll need to demonstrate responsible credit behavior.
Please note that these are general guidelines, and specific lenders may have their own requirements and policies that could result in different waiting periods. Additionally, even after meeting the waiting period requirements, you will need to meet other eligibility criteria, such as demonstrating a stable income and creditworthiness, to qualify for a mortgage loan. It’s essential to consult with a mortgage lender or a financial advisor for the most up-to-date and accurate information regarding your specific situation.