The Short Answer Is Yes!
Having prior trouble with finances (bankruptcy, foreclosure, and short sale) are not uncommon these days. Getting into your dream home is still possible when you use the right government home loan program for you.
In the article below, we will look at a few of the necessary guidelines when purchasing a home with bankruptcy, prior short sale, and/or prior foreclosure on your credit report.
Although the private lenders are restricting their new loan production levels, and there are new fees for the GSE’s, the United States Government is currently subsidizing home loans for borrowers of all credit types. In fact as of today, there is a program where you can purchase a home with a FICO score as low as 500 (whit a down-payment). These loans are provided to all Americans over the age of 18 who meet the underwriting criteria set forth by the Government and any lender overlay.
In conjunction with this, VA HLC is offering low down and $0 down government subsidized home loans for all Americans.
These loans can be used to remodel, refinance, or purchase a home. This type of loan is available even with a prior foreclosure, short sale and chapter 7 or 13 bankruptcy.
Borrowers may still qualify even if in a chapter 13 bankruptcy. However for this loan, approval will need to be granted from the bankruptcy attorney (if the loan fits your need). The Government Subsidized Home Loan Program is designed to help people, especially those who may have had a hard time in the past. These loans are available for single family houses, Duplexes, Tri-plexes, Four-Plexes, Condos, and even rural farm property. Please note these loans are not allowed to be used with industrial property (properties intended for commercial business use with no dwelling or residential component).
The basic loan requirements are:
- No late payments in the last 12 months on any debt (including no collections and no judgments in the last 12 months)
- Stable Verifiable income
- Verifiable 12 months rent payments
- No new collections or new delinquency of any kind including NSF after the date of short sale, bankruptcy, or foreclosure
- 2 years minimum must pass from date of short sale (3 if using an FHA loan)
- 2 years minimum must pass from chapter 7 bankruptcy discharge
- 1 year minimum must pass from filling chapter 13 bankruptcy – Discharge is not required. However it is important to note that the borrower must get prior approval form the bankruptcy trustee.
Please note each loan is subject to other underwriting requirements and determined on a case by case basis.
A Government Home Loan is designed to help people get established or re-established in a home of their own. The idea is that these loans help create an economy that will employ workers in the construction, home improvement, banking and real estate industries as well as provide a roof over the heads of Americans. There are various agencies insuring or guarantying loans such as an FHA Home Loan, USDA Loan or VA Home Loan. Several options are available so it is recommended that you speak with a government loan originator to determine which loan is best for you.
Philip Georgiades is the chief loan adviser for VA Loans Division VA Home Loan Centers. For a limited time, VA Home Loan Centers will originate every type of government subsidized mortgage regardless of prior military service. These loans are available to any American over the age of 18 with reliable income that meets underwriting guidelines. For a VA HLC loan application, visit http://www.vahomeloancenters.org/application-for-va-home-loan-refinance-and-purchse-use/