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How to get an FHA Loan with an FHA Lender after a Bankruptcy

How to get an FHA Loan with an FHA Lender in WA after a Bankruptcy

Michael Patterson
Blog Author / FHA Lender in WA State
Call me at 206-423-4000

Michael Patterson FHA Lender in WAThere is a lot confusion out there regarding how long it actually takes after having a Bankruptcy, Foreclosure or a Short Sale until a person can apply for a new mortgage with an FHA Lender.

Want to make a bet on the right answers? Any takers? (I know the guidelines and even I would be hesitant to take that bet with things changing so rapidly these days.)

Depending on the circumstances surrounding the event, there are possibilities for shorter lengths of time. As a direct FHA Lender in Washington State, I'm often asked by borrowers and real estate agents this exact question. While this post is a little technical in nature, it will shed some light on just what the mortgage lenders and investors want to see.



Ideally, speaking with a lender about your specific situation is probably best, but here's the basics listed below. Call me if you need more info!


How to get a new FHA loan with an FHA Lender after a Bankruptcy

A Chapter 7 Bankruptcy (liquidation) does not disqualify a borrower from obtaining a new loan with an FHA Lender if at least two years have elapsed since the date of the discharge of the bankruptcy. Additionally, the borrower must have re-established good credit or chosen not to incur new credit obligations. The borrower also must have demonstrated a documented ability to responsibly manage his or her financial affairs.


An elapsed period of less than two years, but not less than 12 months may be acceptable if the borrower can show that the bankruptcy was caused by extenuating circumstances beyond his or her control and has since exhibited a documented ability to manage his or her financial affairs in a responsible manner. Additionally, the FHA lender must document that the borrower's current situation indicates that the events that led to the bankruptcy are not likely to recur.


A Chapter 13 Bankruptcy does not automatically disqualify a borrower from obtaining a loan with an FHA lender, provided the FHA lender documents that one year of the payout period under the bankruptcy has elapsed and the borrower's payment performance has been satisfactory (i.e., all required payments made on time). In addition, the borrower must receive permission from the court to enter into the mortgage transaction.


When involved in a bankruptcy, there are many times other factors involved. If you had issues with a short sale or a foreclosure, you'll want to read these additional posts:

How to get an FHA Loan with an FHA Lender in WA after a Short Sale

When a previously owned property was sold for less than what was owed (aka short sale), borrowers are considered eligible for a FHA insured mortgage IF...

Read more: How to Get an FHA Loan with an FHA Lender in WA After a Short Sale

How to get an FHA Loan with an FHA Lender in WA after a Foreclosure

A borrower whose previous principal residence or other real property was foreclosed or has given a deed-in-lieu of foreclosure within the previous three years is generally not eligible for a new FHA-insured mortgage. However...

Read more: How to Get an FHA Loan with an FHA Lender in WA After a Foreclosure


I hope this information has been helpful. If it's raised more questions than answers, WELCOME TO MY WORLD AS AN FHA LENDER! Everyone's circumstances are slightly different so it's very important to review your situation with a qualified mortgage professional.

In addition to being an FHA lender in WA, I am also well versed on VA, USDA and Conventional Loan Guidelines. Call me at (206) 423-4000 if I can be of assistance!


Michael Patterson
Branch Manager / Sr. Loan Consultant

MLO - 69386
Email Michael Patterson

Apply with Michael Patterson FHA Lender in Washington State


This is for informational purposes only and is not meant to be legal advice. Underwriting guidelines are subject to change. Land/Home Financial Services, Inc. currently provides loans in 41 States. Some products may not be available in all states. Restrictions apply. Mortgage Lending in Washington State is authorized under WA Dept of Financial Institutions Consumer Loan License # CL-89331. Land/Home Financial Services is an Equal Housing Opportunity Lender and lends only in states we are licensed in.