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FHA loans are one of the best options for young, first-time home buyers who have not had as much time to save for a large down payment or establish a high credit score.

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FHA Loan Rules for Borrowers After Filing Bankruptcy

FHA Loan Rules for Borrowers After Filing Bankruptcy
FHA loans have specific rules and requirements for borrowers who have filed for bankruptcy. The guidelines can change over time, so it's essential to consult with a qualified lender or FHA-approved counselor for the most up-to-date information. It's essential to focus on rebuilding your credit and maintaining financial stability after bankruptcy to improve your chances of qualifying for an FHA loan. Here are some key points to consider:

Waiting Periods

For Chapter 7 Bankruptcy, borrowers may be eligible for an FHA loan two years after the discharge of the bankruptcy. For Chapter 13 Bankruptcy, borrowers can be eligible for an FHA loan after making 12 on-time payments as part of a repayment plan and receiving permission from the bankruptcy court.

Credit Requirements

After bankruptcy, borrowers should work on rebuilding their credit. A minimum credit score may be required by the lender or FHA. Most lenders typically prefer a score of 580 or higher. However, some may consider borrowers with lower scores on a case-by-case basis with different down payment requirements.

Financial Stability

Lenders will evaluate your financial stability, including your income, employment history, and any post-bankruptcy financial issues. Demonstrating responsible financial behavior and a stable income can increase your chances of loan approval.

Bankruptcy Discharge

Ensure that you have received a discharge from the bankruptcy court. You'll need to provide documentation of this to your lender.

Housing Counseling

FHA may require borrowers with recent bankruptcies to participate in housing counseling programs to ensure they are informed about the responsibilities of homeownership.


If you've experienced a foreclosure in addition to bankruptcy, separate waiting periods may apply.

Lender Discretion

Lenders have some discretion in their underwriting guidelines, so it's essential to work with an FHA-approved lender who can guide you through the process and provide insights based on your specific situation.


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See Your Credit Scores From All 3 Bureaus

FHA Loan Articles

When not to Consider Refinancing a Home

There are plenty of reasons to delay plans to refinance a home. One reason has made big headlines. When borrowers face higher interest rates than originally approved for, that is a good reason to wait to refinance.

How FHA Construction Loan Draw Disbursements Work

When you are approved for an FHA One-Time Close Construction loan, you get a single loan that pays for both the costs to build the house, and serves as the mortgage. One application, one approval process, and one closing date.

Mortgage Rate Predictions for 2024

In the last days of November 2023, mortgage loan rates flirted with the 8% range but have since backed away, showing small but continued improvement. What does this mean for house hunters considering their options to become homeowners soon?

Is It Cheaper to Buy a Home With an FHA Loan or to Rent?

In May 2023, USA Today published some facts and figures about the state of the housing market in America. If you are weighing your options for an FHA mortgage and trying to decide if it’s cheaper to buy or rent, your zip code may have a lot to do with the answers you get.

Why Do FHA Loans Have Borrowing Limits?

FHA loan limits serve as a crucial mechanism to balance financial sustainability, regional variations in housing costs, and the agency's mission to promote homeownership, particularly for those with limited financial resources.

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