Can someone get a home loan while in Chapter 13 bankruptcy? In many situations, the answer is “yes.” This article will explore the ways to qualify while in active repayment and also some of the most common obstacles to qualifying for a home loan in this situation.

Hi, I’m Eric Vander Werff and I specialize in helping borrowers obtain residential home loan financing while in Chapter 13 Bankruptcy. Let’s talk about the ways to qualify for a refinance or buying a home while in active Chapter 13.

• Minimum 12 months since your bankruptcy filing date
• 12 months most recent trustee payments made within the month due
• 580+ credit scores if cash out
• Scores as low as 500 if a purchase transaction
• 12-24 months verification on housing payment – paid on time
• 12-24 other credit items analyzed for on time payments, including auto loans, student loans, mortgage or HELOC, credit cards utilized outside the CH13 plan
• Trustee or court approval

I understand that the situation that led to the Chapter 13 filing was likely a very dramatic event or series of events that were likely outside your control. Your attorney probably advised that Chapter 13 was the best way to consolidate, get caught back up, and stop collections, further negative credit reporting, and or pre-foreclosure action. I’m sure it wasn’t easy and the process was stressful and emotional. The good news is- 12 to 24 months in, you’re likely doing better financially now, or on your way to being in a better place. We can’t control everything that happens to us – but the good news is that if you made your payments as required, kept any items reporting on credit up to date, and current, you may not qualify for the home loan financing you need.

Program options are FHA, VA for eligible veterans, and a number of non-agency or Non-QM products.

Common obstacles to qualifying:

• Late or missed bankruptcy payments (there are exceptions on a case by case basis)
• 30,60,or 90+ days past due on installment or revolving credit accounts within the last 12 months
• Missed or past due court ordered support payments
• Delinquent taxes not included in the CH13 plan
• Undisclosed liens or judgements on title
• Inconsistent income or significant gaps in employment
• Credit scores below program minimums or no credit scores showing

Over the last decade, I have reviewed thousands of applications for borrowers in Chapter 13 Bankruptcy. Many of these applications have been denied by another lender or bank. If you are considering buying a home while in Chapter 13, please reach out for more information by submitting some more information below. If you are a homeowner and would consider a cash out refinance to pay off your Ch13 plan early, please reach out for more information via the “Get more info” button below.

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