How Long Do You Have to Wait After Bankruptcy or Foreclosure to Get a Mortgage in 2026?

Quick Summary: Mortgage waiting periods after bankruptcy range from 1–4 years depending on the loan type and chapter filed. After Chapter 7, expect a 2-year wait for FHA and VA loans or 4 years for conventional. After foreclosure, FHA and USDA require 3 years, VA requires 2 years, and conventional loans require 7 years. Extenuating circumstances can shorten these timelines with documentation. COVID-era FHA recovery exceptions expired September 30, 2025, so standard permanent loss mitigation rules now apply.

Which Situation Matches Yours?

• I just filed for bankruptcy and I’m in a Chapter 13 repayment plan
• My bankruptcy was discharged (Chapter 7 or 13 completed)
• I lost my home to foreclosure
• I sold my home for less than I owed (short sale)
• I kept my home but included the mortgage in my bankruptcy
• I need a loan NOW with no waiting period

How Long After Bankruptcy Can You Get a Mortgage?

The waiting period after bankruptcy depends on the chapter filed and loan type. Chapter 7 filers wait 2 years for FHA and VA, 3 years for USDA, and 4 years for conventional. Chapter 13 filers can apply for FHA or VA loans after 12 months of on-time trustee payments.

The clock starts at the discharge date, not the filing date. The mortgage industry calls these mandatory timelines seasoning periods. Each loan program sets its own seasoning rules, and the differences are significant enough to change your entire homebuying strategy.

Chapter 7 Bankruptcy Waiting Periods by Loan Type

Chapter 7 bankruptcy is the most common form of personal bankruptcy. It liquidates assets to discharge most unsecured debts, and it’s the type that most mortgage guidelines reference first.

The table below shows waiting periods from the Chapter 7 discharge date:

FHA and VA offer the fastest path back at two years. Conventional loans require four. If you can’t wait at all, Non-QM lenders now offer same-day eligibility, but at a steep cost, which we cover below.

Chapter 13 Bankruptcy: Applying During an Active Repayment Plan

Chapter 13 bankruptcy works differently. Instead of liquidating assets, it restructures your debts into a 3-to-5-year repayment plan managed by a court-appointed trustee.

The critical difference: you don’t have to wait for the plan to finish. FHA and VA both allow mortgage applications after just 12 months of on-time trustee payments, provided you get written permission from the bankruptcy court. This requires manual underwriting, a hand-reviewed approval process rather than an automated one, and your lender must verify that you’ve made every payment on schedule.

Once a Chapter 13 plan is fully discharged, the path opens further. There is no additional FHA waiting period after a completed Chapter 13 discharge. Conventional loans require two years from the discharge date, or four years if the case was dismissed rather than discharged.

Discharge Date vs. Dismissal Date: When the Clock Starts

This distinction trips up more borrowers than almost anything else. The discharge date is when the court legally forgives your debts. It’s printed on your discharge papers.

The dismissal date is different. It’s when a case is thrown out, usually because the repayment plan wasn’t completed.

Every standard waiting period starts at the discharge date, not the day you filed. For conventional loans, a dismissed Chapter 13 carries a four-year wait from dismissal. That’s twice the two-year wait you’d face from a successful discharge.

If your case was dismissed, talk to your attorney about whether refiling and completing the plan could shorten your timeline.

What Is the Waiting Period After Foreclosure?

After a standard foreclosure, FHA and USDA loans require a 3-year waiting period from the recorded foreclosure date. VA loans require 2 years, and conventional loans have the longest wait at 7 years. Documented extenuating circumstances can reduce this to 3 years with a 10% down payment. The clock starts when the foreclosure is recorded in county records, not when you surrendered the keys.

Deed-in-lieu and short sale timelines are shorter for most programs, which we break down further below.

FHA Foreclosure Waiting Period (3 Years)

FHA’s 3-year waiting period runs from the date the foreclosure deed is recorded, as documented in county records. This applies whether the foreclosed property had an FHA loan or any other loan type.

One important wrinkle: if you defaulted on a government-backed loan (FHA, VA, or USDA), your name enters the CAIVRS database, the Credit Alert Verification Reporting System. This federal tracking system flags borrowers who’ve defaulted on government obligations, and your new FHA lender is required to check it. Even if your 3-year seasoning period has passed, an unresolved CAIVRS record will block your application.

VA Loan Foreclosure Requirements for Veterans

The VA offers the shortest government-backed foreclosure wait at two years from the recorded date. Veterans should be aware of two things that go beyond the basic timeline.

First, if you foreclosed on a previous VA loan, your VA entitlement, the amount the VA will guarantee, is reduced. You’ll need to obtain an updated Certificate of Eligibility (COE) to see how much entitlement remains. Reduced entitlement may mean a down payment is required on the next purchase.

Second, some aggressive lenders are now offering VA approval at 12 months with strong extenuating circumstances and manual underwriting. This is rare but worth asking about.

Conventional Loan 7-Year Foreclosure Seasoning

Conventional conforming loans carry a 7-year seasoning period after a standard foreclosure. This is the longest of any major loan program. With documented extenuating circumstances, Fannie Mae and Freddie Mac allow a reduced 3-year wait, but you’ll need at least 10% down.

There’s an additional layer most articles miss: private mortgage insurance (PMI) companies often impose their own overlays. Even if Fannie Mae approves your file at three years, the PMI provider may decline to insure it. Check with your lender early about PMI requirements if you’re putting less than 20% down.

USDA Foreclosure and CAIVRS Clearance

USDA loans follow a 3-year waiting period after foreclosure, matching FHA’s timeline. The same CAIVRS requirement applies. If your previous loan was government-backed, your name must clear the federal default database before approval.

USDA adds one more requirement: the property must be in an eligible rural area, which limits where you can buy regardless of your waiting period status.

How Your State’s Foreclosure Process Affects the Timeline

The “recorded foreclosure date” that starts your waiting period clock depends on whether your state uses a judicial or non-judicial foreclosure process. This is a detail most national guides skip, but it can shift your timeline by months.

In judicial foreclosure states (such as New York, New Jersey, Florida, and Illinois), the lender must file a lawsuit and obtain a court order. This process can take 12–36 months, which means the recorded date (and the start of your waiting period) may come well after you left the property.

In non-judicial foreclosure states (such as Texas, California, Georgia, and Arizona), the lender can foreclose through a trustee sale without court involvement. These move faster, often completing in 3–6 months, so the recorded date arrives sooner.

The practical impact: if you’re in a slow judicial state, your waiting period clock may not even start until a year or more after you stopped making payments. Track your county recorder’s office for the actual recorded date rather than assuming it matches your move-out date.

How Do Short Sales and Deed-in-Lieu Affect Your Timeline?

Short sales carry a 3-year waiting period for FHA and USDA, 4 years for conventional, and 2 years for VA. However, the VA itself sets no official short sale waiting period, making the 2-year figure a lender overlay. A deed-in-lieu of foreclosure follows similar timelines but is generally viewed more favorably by underwriters because it shows the borrower cooperated with the lender rather than forcing a legal proceeding.

The conventional loan gap is the most notable: a short sale or deed-in-lieu cuts your wait from seven years to four. That alone can make proactively negotiating a short sale worth the effort if foreclosure looks inevitable.

VA Short Sales: No Official VA Waiting Period

This is one of the most widely misunderstood rules in post-hardship lending. The VA Lenders Handbook (Chapter 4) sets no official waiting period after a short sale. The two-year timeline cited on nearly every mortgage website is a lender overlay, a restriction individual lenders impose on their own.

If you were current on your mortgage payments in the 12 months before the short sale, some VA lenders will waive the waiting period entirely. Veterans working with a lender that doesn’t impose a hard overlay may face little or no wait.

Deed-in-Lieu of Foreclosure: When Cooperation Pays Off

A deed-in-lieu of foreclosure occurs when you voluntarily transfer the property back to the lender to satisfy the mortgage debt, avoiding the formal foreclosure process. For conventional loans, this distinction saves three years, resulting in a 4-year wait instead of 7.

The waiting period starts from the deed transfer date as recorded in county records. Underwriters view this more favorably because it demonstrates a borrower who engaged with the problem rather than walking away.

What Happens When a Mortgage Is Included in Bankruptcy?

When a mortgage is discharged through Chapter 7 bankruptcy and not reaffirmed, Fannie Mae and Freddie Mac start the conventional waiting period at the bankruptcy discharge date, not the later foreclosure recording date. This means the 4-year conventional wait begins at discharge rather than the 7-year foreclosure standard, potentially saving borrowers 3 or more years.

This rule is codified in Fannie Mae Selling Guide B3-5.3-07, and it’s one of the most valuable pieces of insider knowledge in post-bankruptcy lending.

Here’s why it matters: when you include a mortgage in Chapter 7, you stop making payments. The lender eventually forecloses, but that foreclosure might not be recorded for months or even years after your discharge.

Under normal rules, the conventional waiting period would start at that later recording date, triggering a 7-year wait. However, because the mortgage was part of the bankruptcy, Fannie Mae treats the discharge date as the starting point and applies the shorter 4-year timeline instead.

The catch: the mortgage cannot have been reaffirmed. Reaffirmation means you agreed during bankruptcy to keep paying the mortgage and exclude it from the discharge. If you reaffirmed the debt and later lost the home, the standard 7-year foreclosure waiting period applies.

For FHA loans, this distinction is less dramatic. The waiting period is 2 years from discharge for the bankruptcy portion and 3 years for the foreclosure, and the longer timeline applies. But for conventional borrowers, the B3-5.3-07 rule can shave years off the timeline.

How Do Extenuating Circumstances Reduce Waiting Periods?

Extenuating circumstances are one-time, non-recurring events beyond the borrower’s control that directly caused the financial hardship. With proper documentation, these can reduce FHA bankruptcy waits to 1 year, conventional bankruptcy waits to 2 years, and conventional foreclosure waits from 7 years to 3. COVID-era FHA recovery exceptions expired September 30, 2025, so borrowers must now qualify under standard permanent loss mitigation criteria.

What HUD and Fannie Mae Consider Extenuating Circumstances

Both HUD (Handbook 4000.1) and Fannie Mae (Selling Guide B3-5.3-07) define extenuating circumstances as events that represent a significant, sudden change in financial status that made mortgage payments impossible despite previously responsible financial behavior. Qualifying events include:

• Death of a primary wage earner
• Severe illness or medical emergency resulting in major expenses or income loss
• Job loss due to layoff (not voluntary resignation)
• Divorce or legal separation
• Natural disaster (with FEMA declaration)

What does not qualify: voluntary job changes, gambling, general financial mismanagement, or pandemic-related stress claims filed after September 2025.

Why COVID-Era FHA Exceptions No Longer Apply

FHA Mortgagee Letter 2025-12 replaced the earlier 2025-06 letter and let the specific COVID-19 Recovery Options expire on September 30, 2025. Borrowers who submitted hardship claims under the relaxed COVID criteria before that date were grandfathered in.

Anyone applying now must meet the stricter permanent loss mitigation standard. This means the hardship must be documented as a discrete event, not an extended period of pandemic-related financial pressure. The bar is higher, and the documentation requirements are more specific.

Documentation Requirements for Hardship Exceptions

To claim extenuating circumstances, prepare the following:

1. Letter of explanation detailing the event, its financial impact, and your recovery
2. Third-party evidence matching the claim, such as medical records, death certificates, layoff notices, divorce decrees, or FEMA disaster declarations
3. Pre-event credit history showing responsible payment behavior before the hardship
4. Post-event credit recovery demonstrating re-established financial stability

Lenders evaluate the full picture. A strong letter of explanation paired with clear documentation and a clean post-event credit history gives you the best chance at a reduced waiting period.

How Extenuating Circumstances Work in Practice

Consider a borrower who filed Chapter 7 after a spouse’s death led to $180,000 in medical bills and the loss of a dual income. Their documentation package would include the death certificate, hospital billing statements, proof of the income reduction, and a letter of explanation connecting those events directly to the bankruptcy filing.

Because the hardship was a one-time event beyond their control, this borrower would be a strong candidate for the reduced 1-year FHA waiting period instead of the standard two years. The key is that their credit history was clean before the event and they’ve re-established stable finances since.

Lender Overlays: When Agency Guidelines Aren’t Enough

Even if you meet every agency guideline, your lender may impose a lender overlay, an additional restriction beyond the Fannie Mae, FHA, or VA minimum. Common overlays include adding 1–2 years to the waiting period, requiring credit scores 20–40 points above agency minimums, or demanding larger down payments.

Overlays vary by lender, which means shopping matters. One lender’s overlay might block you while another’s won’t. A mortgage broker who works with multiple lenders can identify which ones have the lightest overlays for your situation.

How Do You Calculate Your “Safe to Buy” Date?

Your earliest mortgage eligibility date equals your event date plus the applicable waiting period for your target loan type. For Chapter 7 filers targeting FHA, that’s the discharge date plus 2 years; for foreclosure survivors targeting conventional, it’s the recorded foreclosure date plus 7 years. Add 3–6 months beyond that minimum for credit rebuilding, because meeting the waiting period with a weak credit score still results in denial.

Step-by-Step: Finding Your Event Date

1. Identify the event. Bankruptcy discharge, foreclosure recording, short sale settlement, or deed-in-lieu transfer.
2. Find the exact date. Your discharge date is on your bankruptcy discharge papers. Your foreclosure date is the recorded date in county records, not the date you moved out.
3. Add the waiting period. Match your event to your target loan type using the tables above.
4. Add the credit buffer. Tack on 3–6 months for credit score recovery to ensure you meet lender minimums.

Adding the Credit Rebuilding Buffer

The table below shows realistic “safe to apply” dates for a Chapter 7 discharged on March 15, 2024:

The credit buffer isn’t optional. In practice, most borrowers who apply the day their waiting period ends get denied because their credit score hasn’t recovered to at least 620.

How Can You Rebuild Credit After Bankruptcy or Foreclosure?

Rebuilding credit after a major derogatory event typically takes 12–24 months of consistent effort. The most effective strategy combines secured credit cards, a credit builder loan, and on-time payments on all existing obligations. FHA requires a minimum 580 for 3.5% down, while Fannie Mae’s Desktop Underwriter (DU) technically allows approvals below 620, but nearly all lenders maintain a 620+ overlay in practice.

Minimum Credit Scores by Loan Type After a Derogatory Event

In late 2025, Fannie Mae updated DU’s logic to emphasize comprehensive risk assessment over hard credit score cutoffs. But don’t let that mislead you. The Selling Guide (B3-5.1-01) still lists 620 as the standard minimum, and lender overlays remain firmly in place.

Steps to Rebuild Credit During the Waiting Period

1. Pull your free credit reports from AnnualCreditReport.com within 30 days of discharge. Dispute any debts that should have been discharged but still show as active.
2. Open 2–3 secured credit cards that report to all three bureaus. Use them for small recurring purchases and pay the balance in full every month.
3. Add a credit builder loan through a credit union or fintech lender. These small installment loans exist solely to build payment history.
4. Become an authorized user on a family member’s long-standing credit card with a clean payment history. Their account age and on-time payments will appear on your report.
5. Never miss a payment on anything. One late payment during the waiting period can reset your progress and give underwriters a reason to deny your file.

The goal isn’t just a number. Lenders want to see a pattern of responsible credit management in the years since the event. A 640 score with two years of perfect payment history tells a stronger story than a 680 with recent missed payments.

What Are Non-QM and Fresh Start Loan Options?

Non-QM (non-qualified mortgage) loans and “Fresh Start” programs allow borrowers to purchase a home as soon as 1 day after a bankruptcy discharge or foreclosure completion with no seasoning period. These portfolio loans typically require 20–30% down, accept credit scores as low as 500, and carry interest rates 2–3% above conventional. The tradeoff is speed, because you skip the waiting period entirely.

The “1-Day Out” Fresh Start Program

A Non-QM loan is a mortgage that doesn’t conform to Fannie Mae or Freddie Mac guidelines. Because Non-QM lenders hold these loans on their own books rather than selling them to agencies, they aren’t bound by agency seasoning rules.

The “1-Day Out” or “Fresh Start” product is designed specifically for borrowers exiting a derogatory event. The borrower applies after their bankruptcy is discharged or their housing event is completed. The lender evaluates credit score, down payment, and reserves rather than waiting period compliance.

With Chapter 11 bankruptcies hitting a 10-year high in 2025, lender competition in this space has intensified. Down payment requirements have dropped from 30% to as low as 20%, and maximum loan amounts now reach $2 million at some lenders. The tradeoff remains real. Expect rates of approximately 9–10% compared to 6.5–7% on a standard FHA loan. But for buyers who can’t wait, these programs provide a legitimate path.

Non-QM Qualification Requirements and Tradeoffs

Non-QM loans make sense in specific situations: you have substantial cash for a down payment, you’re paying high rent that exceeds what a mortgage payment would be, or the property you want won’t be available in 2–4 years when your standard waiting period ends. They don’t make sense if you’re stretching to meet the minimum down payment, because the higher rate compounds the financial pressure that may have caused the original hardship.

FAQs

Can I Get a Mortgage During Chapter 13 Bankruptcy?

Yes. FHA and VA loans allow applications after 12 months of on-time trustee payments. You’ll need written court permission to take on new debt, and the loan requires manual underwriting. Your lender must verify that every trustee payment was made on schedule.

Does a Foreclosure on a VA Loan Affect My Entitlement?

It does. If you foreclosed on a VA loan, the VA paid a claim on your behalf, which reduces your remaining entitlement. You’ll need an updated Certificate of Eligibility to see what’s left. Reduced entitlement may mean a down payment is required on your next VA purchase, though you can request entitlement restoration if the loss has been repaid.

Are COVID-Era FHA Mortgage Exceptions Still Available in 2026?

No. FHA’s COVID-19 Recovery Options expired September 30, 2025 per Mortgagee Letter 2025-12. All extenuating circumstances claims now go through standard permanent loss mitigation review, which requires documentation of a discrete hardship event, not general pandemic-related financial difficulty.

What if My Bankruptcy Was Caused by Medical Bills?

Medical debt is one of the strongest extenuating circumstances you can document. Provide hospital billing statements, insurance denial letters, and records showing the sudden financial impact. A Chapter 7 caused by catastrophic medical expenses, well-documented with third-party evidence, is a strong candidate for the reduced 1-year FHA waiting period.

How Long Does a Foreclosure Stay on My Credit Report?

A foreclosure remains on your credit report for 7 years from the date of first delinquency. However, its impact on your score diminishes over time, and most of the damage occurs in the first 2 years. By year 3–4, many borrowers have recovered enough credit score points to qualify for FHA or VA loans.

Is a Short Sale Better Than a Foreclosure for Future Mortgage Eligibility?

For conventional loans, significantly. A short sale carries a 4-year waiting period versus 7 years for a standard foreclosure.

Short sales also cause less credit score damage, and underwriters view them more favorably because they demonstrate proactive financial management. For FHA and USDA, the waiting period is the same (3 years) regardless.

What Documents Do I Need When Applying After Bankruptcy?

At minimum: your bankruptcy discharge papers, 2 years of tax returns, 2 months of pay stubs, 2 months of bank statements, a letter of explanation detailing the circumstances and your recovery, and documentation of any extenuating circumstances you’re claiming. Lenders may request additional evidence depending on the complexity of your case.

What Is a Non-QM Fresh Start Loan?

A Non-QM Fresh Start loan is a portfolio mortgage with no waiting period requirement after bankruptcy or foreclosure. You can apply as soon as 1 day after your event is complete.

These loans require 20–30% down, accept credit scores as low as 500, and carry higher interest rates (typically 2–3% above conventional). They’re designed for borrowers who need to buy before standard seasoning periods expire.

Next Steps: Getting Mortgage-Ready After a Major Credit Event

The path back to homeownership after bankruptcy or foreclosure is clear, but it requires patience, documentation, and a plan. Start by identifying your event date and target loan type, then calculate your earliest eligibility using the tables above. Use the waiting period to rebuild credit aggressively, starting with secured credit cards and a credit builder loan within the first month.

If you need to act sooner, Non-QM Fresh Start loans offer an immediate option at a premium cost. For most borrowers, though, waiting for FHA or VA eligibility at 2–3 years will save tens of thousands in interest over the life of the loan.

One thing worth noting: FHA Mortgagee Letter 2026-03 (effective April 2026) changes how lenders bid on foreclosed properties. While this is a backend industry change, it may affect the availability and pricing of foreclosed homes in your market. Talk to your lender about how this could impact your purchase strategy.

Note: This article cites only primary regulatory sources, including HUD Handbook 4000.1, Fannie Mae Selling Guide, VA Lenders Handbook (M26-7), and USDA Handbook HB-1-3555, rather than third-party blogs or aggregator sites. All waiting periods, credit score thresholds, and program requirements are verified against current agency guidelines. This content is reviewed for accuracy quarterly and updated whenever regulations, rates, or program rules change. It was last verified on February 20, 2026. This article is for informational purposes only and does not constitute legal or financial advice. Consult a licensed mortgage professional or attorney for guidance on your specific situation.