Q: How long after chapter 13 bankruptcy discharge with a lien strip can I finance a new home?
A: According to Fannie Mae, to obtain a new Fannie Mae-backed mortgage after a Chapter 13 bankruptcy, the waiting period is two years from the discharge date or four years from any dismissal date. Freddie Mac's guidelines note a 48-month period for a Chapter 13 bankruptcy caused by "financial mismanagement" or two years from the discharge date.
For FHA-backed loans, it appears the period is only one year, provided you can get the creditors in your plan to provide payment histories that show you have been on time with your payments, plus you'll need permission from the court to enter into a new mortgage transaction.
A 25-year expert observer of the mortgage and consumer debt markets, Keith Gumbinger has been cited in thousands of articles covering a wide range of consumer finance and economic topics in outlets ranging from the Wall Street Journal to the Bottom Line newsletters. He has been a featured guest on national broadcasts for CNN, CNBC, ABC, CBS and NBC television networks and has been heard on NPR and other national and local radio programs. Keith is the primary researcher and writer for HSH.com's MarketTrends newsletter and has authored or co-authored a number of consumer guides on mortgages, home equity, refinancing and more.