If you’re currently in an active Chapter 13 Bankruptcy, you might think that qualifying for a mortgage is out of reach, but that’s not the case! FHA guidelines allow borrowers with an open Chapter 13 bankruptcy to obtain financing under specific conditions.
Here’s what you need to know:
FHA Guidelines for Open Chapter 13 Bankruptcy Loans
- 12 Months of On-Time Payments: You must have made a minimum of 12 full months of regular payments to the court as agreed in your payment plan.
- No Late Payments: All payments must be on time; zero late payments allowed.
- Manual Underwriting Required: If your Chapter 13 has not been discharged for at least two years, manual underwriting will apply, and reserves will be required.
- Court Approval: You must obtain written permission from the bankruptcy court allowing you to enter into a mortgage transaction.
- No Modifications to the Payment Plan: Your repayment plan cannot have been modified due to hardship or other issues.
How MortgageDepot Can Help
- Review your bankruptcy payment history to ensure you are eligible.
- Guide you through the court approval process, allowing you to obtain the required documentation without stress.
- Work with underwriters who understand FHA guidelines for open Chapter 13 cases.
- Offer personalized solutions to enhance your chances of approval and secure favorable terms.
Why Choose MortgageDepot?
Many lenders shy away from financing during bankruptcy, but at MortgageDepot, we see possibilities where others see obstacles. Our experience, industry relationships, and commitment to finding solutions mean you don’t have to wait until your bankruptcy is discharged to move forward with your homeownership goals.
If you’re in an active Chapter 13 and want to buy or refinance a home, contact us.
