VA Loans

[fastninja]

Can you get a VA or FHA loan after bankruptcy? I am in the process of filling this monday and would like to know if its possible after discharge? If so how long would it take. Thanks board

[fsugirl]

I know to get an FHA loan you have to wait 2 years post BK. I am not sure about VA. I would imagine it's the same rules ? HTH !!

[SinkingFast]

I found the following info for you regarding VA Loans and BK:

Can I get a VA loan if I have had a bankruptcy in the last few years?

The fact you and/or your spouse have been adjudicated bankrupt does not in itself disqualify you for a VA home loan. The following rules apply:

* If the bankruptcy was discharged more than 2 years ago, it may be disregarded
* If the bankruptcy was discharged within the last 1 to 2 years, it is probably not possible to determine that you and/or your spouse are a satisfactory credit risk unless both of the following requirements are met:
o you and/or your spouse have reestablished satisfactory credit, and
o the bankruptcy was caused by circumstances beyond your and/or your spouses control (such as unemployment, medical bills, etc.)
* If the bankruptcy was discharged within the past 12 months, it will not generally be possible to determine that you and/or your spouse are satisfactory credit risks.

http://www.homeloans.va.gov/faqpreln.htm

For more info about the VA Loan program, you can visit the VA Home Loan website:

http://www.homeloans.va.gov/

[MTG_BANKER_OH]

Can you get a VA or FHA loan after bankruptcy? I am in the process of filling this monday and would like to know if its possible after discharge? If so how long would it take. Thanks board

VA is the same as FHA pretty much, you can not have any government defaults or defaults on a VA loan. It will take 2 years from the discharge. And sometimes it will take 3 years from the point where they sellyour home at autcion which can take some time, it all depends on the underwriter.

[Pumpkin729]

VA LOAN CREDIT ISSUES


VA will analyze a borrower's past credit performance in determining the loan for approval. A borrower who has made timely payments for the last 12 months serves as a guide and demonstrates their willingness to repay future credit obligations. On the opposite side, a borrower who reflects continuous slow payments, judgments and delinquent accounts is not a good candidate for loan approval.

Below is a list of items concerning the borrower's credit.


LATE MORTGAGE PAYMENTS
In circumstances not involving bankruptcy, satisfactory credit is generally considered to be reestablished after the veteran, or veteran and spouse, have made satisfactory payments for 12 months after the date of the last derogatory credit item(s).

When the underwriter analyzes the borrowers credit; it is the overall pattern of credit behavior that must be reviewed, rather than isolated cases of slow payments. A period of financial difficulty does not disqualify the borrower if a good payment pattern has been maintained since then.

Account balances reduced to judgment by a court must either be paid in full or subject to a repayment plan with a history of timely payments.


NO CREDIT HISTORY
In the area of credit, the lack of an established credit history should not be a deterrent to loan approval. As provided in the credit standards, a satisfactory payment history on items such as rent, utilities, phone bills, etc., may be used to establish a satisfactory credit history.


CHAPTER 7 BANKRUPTCY
The VA guidelines state that a minimum of two years must elapse since the discharge date of the borrower and / or spouse's Chapter 7 bankruptcy, not the filing date. A full explanation of the bankruptcy will be required. The borrower must also have re-established good credit, qualify financially and have good job stability.


CHAPTER 13 BANKRUPTCY
The VA guidelines state that they will consider a borrower still paying on a Chapter 13 Bankruptcy if the payments to the court have been satisfactorily made and verified for a period of one year. In addition, the court trustee will need to give written approval to proceed. A full explanation of the bankruptcy will be required. The borrower must also have re-established good credit, qualify financially and have good job stability.


COLLECTIONS, JUDGEMENTS AND FEDERAL DEBTS
The VA guidelines state that if a collection is minor in nature, it usually does not need to be paid off as a condition for loan approval. Judgments must be paid in full prior to closing. A borrower is not eligible for the loan if they are delinquent on any federal debt. This can include tax liens, student loans, etc. Payment arrangements that would bring the borrower up to date may be considered for loan approval.


FORECLOSURE
A borrower whose previous residence or other real property was foreclosed on or given a deed-in-lieu of foreclosure within the previous two years since the disposition date is generally not eligible for a VA insured mortgage. If the foreclosure was on a VA loan, the applicant may not have full entitlement available for the new loan.


CONSUMER CREDIT COUNSELING PLAN
If a veteran, or veteran and spouse, have prior adverse credit and are participating in a Consumer Credit Counseling Plan, they may be determined to be a satisfactory credit risk if they demonstrate 12 months' satisfactory payments and the counseling agency approves the new credit.

[chucko]

195205629-fb-793

What are you doing?

[FraggleRock]

Word of caution that VA loans carry a VA fee. I believe it's about 2% of the loan is what they charge. They can roll it into the mortgage but it will be there.

[cjmax_2008]

Yes, but a 2% fee up front or rolled into the loan is way better than 10% interest for the life of the loan. I am looking at a 6.5% interest rate w/2yrs out of Chptr 7, and no down payment, (not a refi). I'll pay the 2% any day!

[DisneyGirl]

We just did a VA loan (well a CalVet loan but it's pretty much the same thing). We were 3 years out of BK though but they said the minimum is 2 years. As for the fee, yes there is one but our seller paid it not us.

Sorry - I just noticed that this thread is very old! My apologies for replying.

[lrprn]

cjmax, you've posted to a very old thread (2006). That's against our forum rules because old threads can contain outdated information. In the future, please start a new thread of your own - thanks!