FHA & VA Financing with a Chapter 13 Bankruptcy

I have been in a chpater 13 for over a year with good payments. I have researched getting a VA loan and a FHA loan. I am a veteran. I have been told several different things. Yes on VA. No on Va. Yes on FHA. No on FHA. Yes on FHA if it’s 75% paid off. What is the real deal in today’s mortgage world? The siutation that cuased the chapter 13 is 100% better. If I could have waited 6 more months… .

Albert

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Hello Albert,

The answer is ‘yes’ on FHA and ‘yes’ on VA.

FHA rules per the Dept. of HUD:

Question 3 – Can a mortgagor acquire a FHA-insured mortgage while in a Chapter 13 bankruptcy?

Answer – HUD underwriting rules state that a person in Chapter 13 bankruptcy can purchase a home subject to a FHA-insured mortgage. Requirements are the applicant: must have completed one year of payments as required while under Chapter 13 and must obtain a letter from the Trustee of the court, stating the dollar amount the applicant can borrow. See HUD Handbook 4155.1.

VA rules per the Dept. of Veterans Affairs:

“If the applicant has satisfactorily made at least 12 months’ worth of the payments and the Trustee or the Bankruptcy Judge approves of the new credit, the lender may give favorable consideration.”

Thanks for the questions and hope this helps.

Paul

(source= hud.gov/offices/hsg/sfh/nsc/faqgnsrv.cfm)

(source= warms.vba.va.gov/admin26/pamphlet/pam26_7/ch04.doc)