The short answer? Yes you can. There are however some guidelines you must know about. After reading different situations, you may be able to qualify now. If that is the case, please complete the VA loan pre-qualification form to get started.
We will cover a few different scenarios, but first you will need to know a couple of things. What was your discharge date (Chapter 7)? How many payments have you made (Chapter 13)? Who is your trustee? Was there a property involved in the bankruptcy, or a foreclosure? What date was the property sold? Do you have open lines since the bankruptcy? If you are unsure of some of the information you may want to check your credit to get a better idea.
Let’s start off looking at a Chapter 7 bankruptcy scenario with no property involved. This is where knowing your discharge date is important. Once you have gone 24 months since the discharge you are eligible to apply for a VA home loan. This is by no means a guarantee of approval, just the first objective to pass. In any scenario there are minimum score requirement, and you must have re-established positive tradelines. For assistance with building your credit be sure to visit SmartCreditBuilding.com.
Moving on to a Chapter 13 bankruptcy there is a shorter timeframe and it does not have to be discharged. Chapter 13 is a repayment plan on your outstanding debts sometimes called a “wage earners plan”. The period of time to pay it off can range up to 5 years in some cases. Don’t fret, this doesn’t mean you have to pay it off and then wait two years. If you have made 12 consecutive on time payments and the trustee gives permission for you to take on new debt you could be eligible for a VA home loan provided you have reestablished credit and had a good payment history.
Now comes the sticky part. When properties are involved in the bankruptcy you are not in as much control. You still have the minimum waiting period for a home loan application, however there is an additional period past the sale of the property. It may have been two plus years since filing, or discharge but the bank may not have sold the previous property. This is where it becomes important to know the sale date. VA guidelines require a 24 month waiting period from the sale of the property by the bank.
Re-establishing credit is just as important as the waiting periods. Use the time in between to show that you have overcome obstacles and are ready for the next step. A secured credit card and professional credit coaching could be the keys to your success.
Hopefully this provides some hope to all of our Veterans that may have previously faced a hardship. We are here to assist you in every way possible within the guidelines. Our team is experienced in just about any scenario you could imagine. Don’t hesitate to reach out and let us help you use the VA benefits you earned by serving our country, and make home ownership a dream come true.