Purchase Tips · May 17, 2025
Buying a Home After Bankruptcy or Foreclosure
A past bankruptcy or foreclosure does not permanently close the door on homeownership. Here are the waiting periods by loan type and what to do during that time.
A bankruptcy or foreclosure has a defined waiting period in mortgage lending — not a permanent ban.
After Chapter 7 Bankruptcy
FHA: 2 years from discharge. VA: 2 years from discharge. Conventional: 4 years from discharge. USDA: 3 years from discharge.
After Chapter 13 Bankruptcy
FHA and VA: 12 months into the plan with trustee approval. Conventional: 2 years from discharge, 4 years from dismissal.
After Foreclosure
FHA: 3 years from foreclosure date. VA: 2 years. Conventional: 7 years (3 years in documented hardship circumstances). USDA: 3 years. Note: deed-in-lieu and short sales have shorter waiting periods than full foreclosure.
What to Do During the Waiting Period
Rebuild credit through secured cards, on-time payments, and low balances — many borrowers reach 640+ within 2 years. Save aggressively for down payment and reserves. Document the hardship (medical emergency, job loss, divorce). Talk to a lender 12-18 months before the waiting period ends so you are in optimal position when the clock expires.
HMS has helped many IL, FL, and IN buyers purchase homes after credit setbacks. Call 309-222-8286.