How to Get a Home Loan After a Bankruptcy

For years, a major financial issue like a foreclosure or a bankruptcy meant that it was pretty much impossible to secure a home loan at any time in the near future. However, there were always options, even if they weren’t the most advantageous to borrowers. Today, it’s easier to secure a mortgage loan following a bankruptcy or foreclosure, and those in the market for a home have choices available to them.

Understanding how to get a home loan after bankruptcy is pretty much the same as it would be to secure a loan without one in your past – it all comes down to knowing where to look and what to do. But thanks to recent changes in lenders’ policies, it’s certainly easier to do.

The main reason it’s become easier to do is because major lenders like Fannie Mae have changed their standards to be more in line with the policies set by the FHA. Specifically, the waiting period has been greatly reduced. In the past, borrowers had to wait a minimum of four years before they could reapply for a mortgage loan. Today, Fannie Mae has changed that minimum to just two years. As a result, Americans can start shopping for a new home loan far more quickly than they could in the past.


Along with these new standards, there are still government backed options worth looking into as well. In particular, the FHA Back to Work program is one worth thinking about. It allows shoppers to look for a new home loan just one year after a negative financial event, and could lead to home ownership far faster than it was once possible.

There are also hardship programs that can help borrowers secure a loan. By proving that unforeseen events led to bankruptcy, you could qualify for the Fannie Mae Extenuating Circumstances program and get the loan that you need.

It’s also worth noting that while things like your credit score will impact the terms of your loan, it’s still possible to secure a loan with less than perfect credit. Talking to a professional is the best way to find the options that work best for your situation, but the important thing to remember is that you do have options.

With interest rates still incredibly low, it is a great time to secure a home loan and move into the home of your dreams. Thanks to these new policies, it’s also possible even for those who have suffered due to the economic downturn in the past.

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