# How long after bankruptcy or foreclosure can you buy a house?

Source: https://nobullshitloans.com/buy/after-bankruptcy-or-foreclosure/
By Tyler Rood, Loan Officer, NMLS ID # 2064776, Edge Home Finance, LLC (NMLS ID # 891464). Updated 2026-11-09.

## The short answer

After a Chapter 7 discharge, FHA and VA loans generally need 2 years and conventional loans 4 (2 with extenuating circumstances); after foreclosure, VA asks 2 years, FHA 3 from title transfer and conventional 7 (3 with extenuating circumstances). USDA treats a discharge within 36 months as significant derogatory credit. In a Chapter 13, FHA and VA can lend during the plan after 12 months of on-time payments, with written permission from the court (FHA) or trustee (VA).

A bankruptcy or a foreclosure is a hard chapter. It isn't the last one. Every loan program has a clock, and once yours runs out, that door opens again. Here's how long after bankruptcy you can buy a house on each loan program, the foreclosure and short sale waits, and what to do while the clock runs so you're ready the day it does.

## How long after bankruptcy can I buy a house?

For a Chapter 7, the common case: about 2 years from discharge on FHA or VA, and 4 years on a conventional loan, or 2 years if the bankruptcy came from extenuating circumstances. USDA counts a discharge within the last 36 months as significant derogatory credit. If its automated system returns an Accept, there's generally no extra step; otherwise the lender needs a credit exception.

Chapter 13 works differently, because you can sometimes buy while the plan is still running. That's covered below.

## Waiting periods by loan program

These are the program rules as of November 2026. A lender can add its own stricter rules on top (an overlay), so treat these as the floor.

| Event | Conventional | FHA | VA | USDA |
|---|---|---|---|---|
| Chapter 7 bankruptcy | 4 years from discharge or dismissal; 2 years with extenuating circumstances | 2 years from discharge; 12 to 24 months with extenuating circumstances and re-established credit, manually underwritten | 2 years from discharge; as little as 1 year with re-established credit when the cause was beyond your control | Discharged within 36 months is significant derogatory credit; an exception is needed unless the automated system returns Accept |
| Chapter 13 bankruptcy | 2 years from discharge, or 4 years from dismissal (Fannie Mae allows 2 from dismissal with extenuating circumstances) | During the plan: after 12 months of on-time plan payments, with written permission from the bankruptcy court, manually underwritten. Discharged under 2 years ago: manually underwritten | During the plan: 12 months of payments made as agreed plus the trustee's permission. A completed plan counts as re-established credit | During the plan: every payment on time plus court or trustee permission. Completed under 12 months ago: exception needed unless the system returns Accept |
| Foreclosure | 7 years from completion; 3 years with extenuating circumstances | 3 years from the date title transferred; less with documented extenuating circumstances | 2 years from completion; as little as 1 year with re-established credit when the cause was beyond your control | Title transferred within 36 months is significant derogatory credit (same exception rule) |
| Deed-in-lieu of foreclosure | 4 years; 2 with extenuating circumstances | 3 years | No set waiting period; late mortgage payments still count | Within 36 months: exception needed unless the system returns Accept |
| Short sale | 4 years; 2 with extenuating circumstances | 3 years, waived if you were current on your mortgage and installment debts for the 12 months before the sale | No set waiting period; late mortgage payments still count, and lenders often add a wait | Closed within 36 months: exception needed unless the system returns Accept; a post-divorce exception exists |


**Chart: The standard wait in years, by loan program.** FHA and VA are the first doors to reopen after a Chapter 7, VA is the shortest after a foreclosure, and conventional waits longest after both.

|  | After a Chapter 7 discharge | After a foreclosure |
|---|---|---|
| VA | 2 | 2 |
| FHA | 2 | 3 |
| USDA | 3 | 3 |
| Conventional | 4 | 7 |

_Program rules as of November 2026, without extenuating circumstances. A lender can add its own stricter rules on top. USDA's 36 months is its window for significant derogatory credit, and USDA can be sooner when its automated system returns an Accept._


A few details the table can't hold:

- **Conventional** shows Fannie Mae's rules. Freddie Mac's are nearly the same on manually underwritten files; on an automated Accept, Freddie's system weighs the event itself. Fannie Mae also adds a longer wait if you've had more than one bankruptcy in seven years: 5 years from the most recent, or 3 with extenuating circumstances.
- **A foreclosure with extenuating circumstances** gets you back to conventional in 3 years, but through year 7 Fannie Mae caps the loan at 90% loan-to-value and allows only a primary-residence purchase or a limited cash-out refinance.
- **USDA** also needs an agency-approved exception if you had a previous USDA loan that ended in a loss within the last 7 years.
- **FHA** measures each wait to the date your FHA case number is assigned, which happens early in the loan process, not at closing.
- **VA** has the shortest floors in the table, and lenders often add their own wait on top, so I confirm the lender's rule before we count on VA's.

## Buying a house after Chapter 7

Chapter 7 is the bankruptcy where the debts are wiped out and you start fresh. The program you choose decides how soon you can buy, and the difference can be two full years. [FHA loans](https://nobullshitloans.com/loans/fha/) and VA loans are usually the first doors to reopen.

**Worked example: A Chapter 7 discharged in March 2025 (hypothetical)**
- FHA: 2 years from discharge: March 2027
- VA: 2 years from discharge: March 2027
- Conventional with extenuating circumstances: 2 years: March 2027
- USDA: past the 36-month window: March 2028
- Conventional: 4 years: March 2029
Note: With documented extenuating circumstances, FHA can go as early as 12 months on a manual underwrite, and VA as early as 1 year with re-established credit. USDA can be sooner when its automated system returns an Accept.


Being eligible on a date isn't the same as being approved on it. In my files, the underwriter wants to see by then that you've re-established credit: new accounts opened and paid on time, low balances, and nothing new gone wrong since the discharge. Start that the month your case closes, not the month before you shop.

## Can you get a mortgage in Chapter 13?

Yes, and sometimes before the plan is finished. Chapter 13 is the bankruptcy where you repay creditors through a court-approved plan, usually over several years. Because you're paying, the programs treat it more gently than a Chapter 7.

**During the plan.** FHA and VA can lend once you've made 12 months of on-time plan payments and have written permission: FHA's handbook asks for the bankruptcy court's, and VA asks for the trustee's. USDA wants every plan payment on time plus the court's or trustee's permission. Expect a [manual underwrite](https://nobullshitloans.com/buy/underwriting/) on FHA, which means a person reviews the whole file against hard limits instead of the automated system.

**After the plan.** Conventional loans count 2 years from the discharge date, or 4 years from a dismissal. On FHA, a discharge less than 2 years old means a manual underwrite. VA counts a completed plan as re-established credit in its own right.

**My take**
If you're 12 months into a Chapter 13 and paying on time, call me before you assume you have to wait out the whole plan. Getting permission from the court or trustee takes paperwork and some time, so that conversation should start now.


## Foreclosure waiting period for FHA, VA and conventional loans

VA is the shortest at 2 years from completion. FHA is 3 years from the date title transferred. Conventional is 7 years, or 3 with extenuating circumstances under the 90% loan-to-value limit described above. A deed-in-lieu, where you hand the house back instead of going through foreclosure, shortens the conventional wait to 4 years (2 with extenuating circumstances); FHA keeps it at 3, and VA sets no waiting period for it.

**Worked example: A foreclosure completed in June 2024 (hypothetical)**
- VA: 2 years from completion: June 2026
- FHA: 3 years from title transfer: June 2027
- Conventional with extenuating circumstances: 3 years: June 2027
- USDA: past the 36-month window: June 2027
- Conventional: 7 years: June 2031


For a veteran, that means a foreclosure from mid-2024 may already be past VA's waiting period today. One catch: if the home you lost had a VA loan, part of your entitlement can stay tied up. The rest of the program is on [how VA loans work](https://nobullshitloans.com/veterans/va-loan/).

## Short sale waiting period

A short sale is when the lender lets you sell for less than you owe. Conventional loans wait 4 years, or 2 with extenuating circumstances. FHA waits 3 years, but waives the wait if you were current, with no 30-day lates on your mortgage and installment debts, for the 12 months before the sale. VA sets no waiting period, though late mortgage payments before the sale still count and many lenders add a wait of their own. USDA treats a short sale closed within 36 months like the other events: an exception is needed unless its system returns an Accept.

## What counts as extenuating circumstances?

Events outside your control, such as a serious illness or the death of a wage earner. Fannie Mae's test is a one-time event beyond your control that caused a sudden, significant and lasting drop in income or a catastrophic jump in your bills, leaving you no reasonable option but to fall behind. FHA's handbook says divorce on its own doesn't qualify, and neither does being unable to sell after a job transfer or relocation. You document it: a letter of explanation with the dates and facts, and the paperwork that backs it up. If your story fits, it can cut two to four years off a conventional wait, so it's worth the conversation.


**Chart: What extenuating circumstances do to a conventional wait.** A documented one-time event beyond your control can cut two to four years off each of these conventional waits.

|  | Standard wait, in years | With extenuating circumstances, in years |
|---|---|---|
| Chapter 7 bankruptcy | 4 | 2 |
| Foreclosure | 7 | 3 |
| Deed-in-lieu of foreclosure | 4 | 2 |
| Short sale | 4 | 2 |

_Fannie Mae's rules as of November 2026. After a foreclosure with extenuating circumstances, Fannie Mae caps the loan at 90% loan-to-value through year 7 and allows only a primary-residence purchase or a limited cash-out refinance._


## What to do during the waiting period

The waiting period isn't dead time. The people who close on the first eligible day used it.

1. **Find your date.** Pull your discharge papers, or the paperwork showing when the foreclosure was completed or the short sale closed. Every clock runs from a specific date, and the underwriter will ask for the document.
2. **Check your reports.** Make sure every account tied to the event reports the way your paperwork says it ended. Errors are worth disputing early, because disputes take weeks.
3. **Rebuild on purpose.** A secured card, used lightly and paid in full, then a regular card as your score climbs. My full ladder is on [the credit score page](https://nobullshitloans.com/buy/credit-score/).
4. **Put every bill on autopay.** One new late payment after a bankruptcy undoes a lot of good months.
5. **Save.** The lower your score, the more money a lender wants to see behind you after closing. Reserves also make a manual underwrite easier.
6. **Write your letter now,** while the dates are fresh: what happened, when it ended, what's different. One page.
7. **Call me about three months before your date.** A credit report stays good for about 90 days in my practice, so we can time the application and documents so the file is ready when your clock runs out, with a full [pre-approval](https://nobullshitloans.com/buy/pre-approval/) behind your offer.


Every day you pay your bills on time, a seam breaks, and eventually the scarlet A goes away. If another lender told you no or told you to wait, text me. A second look at the actual report costs you nothing, and the answer is often closer than you were told.

## Frequently asked questions

### I filed bankruptcy a couple of years ago. Will it affect my mortgage?

Yes, but mostly in which loan you can use and when. About two years past a Chapter 7 discharge, FHA and VA are often back on the table, while a conventional loan usually wants four. What the lender looks at next is how you have handled credit since: on-time payments, low balances and nothing new gone wrong.

### Does the waiting period start when I filed or when the case was discharged?

For conventional, FHA, VA and USDA loans, the clock runs from the discharge date (conventional also counts from a dismissal date). Chapter 13 is the exception that works during the case: FHA and VA can lend after 12 months of on-time plan payments with written permission (the bankruptcy court's on FHA, the trustee's on VA), and USDA wants every plan payment on time plus permission from the court or trustee.

### Is a deed-in-lieu or a short sale better than a foreclosure for buying again?

On a conventional loan, by a lot: 4 years (2 with extenuating circumstances) instead of 7. On FHA it's 3 years either way, but the short sale wait can be waived if you were current on your mortgage and installment debts for the 12 months before the sale. VA sets no waiting period for either one, though late mortgage payments leading up to it still count in the credit review.

### Can I use my VA loan again after a foreclosure?

Yes, after the waiting period: 2 years from the date the foreclosure was completed, or as little as 1 year if the cause was beyond your control and you've re-established credit. If the home you lost was financed with a VA loan, part of your entitlement can stay tied up, which changes how much you can borrow with no down payment. That math is on [VA entitlement](/veterans/va-entitlement/).

### Do I need a letter of explanation for a bankruptcy or foreclosure?

Yes. Expect to give the underwriter your discharge papers (or the foreclosure or short sale paperwork) plus a short letter. Keep it to dates and facts: what happened, when it ended and what's different now. One page is plenty.

## Sources

- [Fannie Mae Selling Guide B3-5.3-07, significant derogatory credit events, waiting periods and re-establishing credit](https://selling-guide.fanniemae.com/sel/b3-5.3-07/significant-derogatory-credit-events-waiting-periods-and-re-establishing-credit)
- [Fannie Mae Selling Guide B3-5.3-08, extenuating circumstances for derogatory credit](https://selling-guide.fanniemae.com/sel/b3-5.3-08/extenuating-circumstances-derogatory-credit)
- [Freddie Mac, underwriting reminders for LPA Caution risk class mortgages (November 2023)](https://sf.freddiemac.com/docs/pdf/fact-sheet/caution_remind.pdf)
- [HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook (Update 18)](https://www.hud.gov/sites/default/files/Housing/documents/40001-hsgh-Update-18.pdf)
- [VA Loan Guaranty Conference 2023, credit underwriting](https://www.benefits.va.gov/HOMELOANS/documents/conf/2023-lender-d2-04-credit-underwriting.pdf)
- [USDA Handbook HB-1-3555, Chapter 10, credit analysis](https://www.rd.usda.gov/files/3555-1chapter10.pdf)

## Disclosures

Individual Originator: Tyler Rood, Loan Officer, NMLS ID # 2064776 (www.nmlsconsumeraccess.org). Licensed in NC, PA, TX and VA.
Edge Home Finance, LLC | NMLS ID # 891464 | www.nmlsconsumeraccess.org. Licensed in all U.S. states & D.C., EXCEPT New York. Edge Home Finance, LLC is a mortgage broker, not a direct lender or creditor. Virginia Broker License MC-7006. North Carolina Mortgage Broker License B-201539. Pennsylvania Mortgage Broker License 81041. Texas: Mortgage Company License, Department of Savings and Mortgage Lending.
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