# Getting a mortgage after bankruptcy or foreclosure

> Waiting periods for Fannie Mae, VA and USDA loans after Chapter 7, Chapter 13, foreclosure or a short sale, the exceptions, and what to do meanwhile.

URL: https://mortgage-math-us.com/blog/mortgage-after-bankruptcy-or-foreclosure/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

For a conventional loan sold to Fannie Mae, the wait is 4 years after a Chapter 7 discharge, 2 years after a Chapter 13 discharge, 4 years after a short sale or deed-in-lieu and 7 years after a foreclosure — cut to as little as 2 years with documented extenuating circumstances. Government loans are shorter: VA generally disregards a bankruptcy discharged more than 2 years ago, and USDA treats a Chapter 7 or foreclosure as no longer adverse after 36 months. During a Chapter 13 plan, VA and USDA can both approve a new loan after 12 months of on-time payments, with court or trustee approval.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Fannie Mae wait after Chapter 7 | 4 years | [Fannie Mae Selling Guide B3-5.3-07](https://selling-guide.fanniemae.com/sel/b3-5.3-07/significant-derogatory-credit-events-waiting-periods-and-re-establishing-credit) | Aug 7, 2019 |
| Fannie Mae wait after foreclosure | 7 years | [Fannie Mae Selling Guide B3-5.3-07](https://selling-guide.fanniemae.com/sel/b3-5.3-07/significant-derogatory-credit-events-waiting-periods-and-re-establishing-credit) | Aug 7, 2019 |
| Fannie Mae wait after a short sale or deed-in-lieu | 4 years | [Fannie Mae Selling Guide B3-5.3-07](https://selling-guide.fanniemae.com/sel/b3-5.3-07/significant-derogatory-credit-events-waiting-periods-and-re-establishing-credit) | Aug 7, 2019 |
| VA: bankruptcy older than this may be disregarded | 2 years | [U.S. Department of Veterans Affairs: Credit standards FAQ](https://homeloans.va.gov/CreditStandards/runtime/faq/020100000050.html) | Oct 29, 2026 |
| USDA: Chapter 7 no longer adverse after | 36 months | [USDA Rural Development HB-1-3555, Chapter 10 (Attachment 10-A)](https://www.rd.usda.gov/sites/default/files/RD-SFH-3555CHAPTER10.pdf) | Mar 19, 2020 |
| USDA: foreclosure or short sale no longer adverse after | 36 months | [USDA Rural Development HB-1-3555, Chapter 10 (Attachment 10-A)](https://www.rd.usda.gov/sites/default/files/RD-SFH-3555CHAPTER10.pdf) | Mar 19, 2020 |

## Waiting periods by loan type

Each loan program sets its own clock, measured from the discharge or dismissal date of a bankruptcy, or the completion date of a foreclosure, short sale or deed-in-lieu. The table puts the official periods side by side.

*Waiting periods after a significant credit event*

| Event | Fannie Mae | Fannie Mae, extenuating circumstances | VA | USDA guaranteed |
|---|---|---|---|---|
| Chapter 7 bankruptcy | 4 years | 2 years | Generally 2 years; 12 months at the earliest | 3 years |
| Chapter 13, discharged | 2 years | 2 years (no reduction) | — | Completed plan accepted; recent completions need more documentation |
| Chapter 13, still paying | Clock starts at discharge or dismissal | — | After 12 months of on-time plan payments, with trustee or court approval | After 12 months of on-time payments, with court or trustee permission |
| Chapter 13, dismissed | 4 years | 2 years | — | — |
| More than one bankruptcy in seven years | 5 years | 3 years | — | — |
| Foreclosure | 7 years | 3 years, with limits | Not disqualifying in itself; judged like a bankruptcy | 3 years |
| Short sale or deed-in-lieu | 4 years | 2 years | Not set separately — ask the lender | 3 years |

A dash means the program’s rules don’t set a separate period for that case, so it falls under the lender’s general credit review.

**FHA** sets its periods in HUD’s Single Family Housing Policy Handbook 4000.1, which HUD updates regularly. They aren’t listed here; ask an FHA lender to check your dates against the current handbook, and see our [FHA loans guide](https://mortgage-math-us.com/loan-types/fha-loans/) for the program’s other rules.

## Chapter 7 vs Chapter 13: why the chapter matters

A **Chapter 7** bankruptcy usually wipes out most unsecured debts within months, and the clock starts at discharge. For a conventional loan the wait is 4 years, or 2 years if the bankruptcy was caused by circumstances beyond your control.

A **Chapter 13** repays creditors through a court-approved plan over several years. Because you are already making regular payments, government programs let you apply before the plan ends: VA and USDA can both approve a new loan after 12 months of on-time payments, in both cases with permission from the trustee or the court. Fannie Mae waits for the end of the case — only 2 years after a discharge, but 4 years if the case was dismissed without completing the plan.

That difference is worth knowing if your plan is in trouble: on a conventional loan, finishing a Chapter 13 instead of having it dismissed brings your next mortgage 2 years closer.

## Foreclosure, short sale and deed-in-lieu

How the home was given up matters as much as when. Under Fannie Mae’s rules a [short sale](https://mortgage-math-us.com/glossary/short-sale/) or deed-in-lieu means a 4-year wait, while a completed [foreclosure](https://mortgage-math-us.com/glossary/foreclosure/) means 7 years — 3 years longer. If you are behind on payments now and talking to your servicer, that gap is a reason to ask about alternatives to foreclosure early.

Even with extenuating circumstances, a foreclosure brings extra limits between years 3 and 7:

> **Worked example: Foreclosure completed September 16, 2024, extenuating circumstances documented, buying a $300,000 home**
>
> | | Fannie Mae |
> |---|---|
> | Earliest closing with extenuating circumstances | September 16, 2027 |
> | Maximum loan-to-value until year 7 | 90% |
> | Minimum down payment on $300,000 | $30,000 |
> | Allowed transactions | Buying a principal residence, or a limited cash-out refinance |
> | Second homes, investment property, cash-out refinance | Not until September 16, 2031 |
> | Without extenuating circumstances | Not until September 16, 2031 |
> 
> A short sale or deed-in-lieu completed the same day would allow a Fannie Mae loan from September 16, 2028, or September 16, 2026 with extenuating circumstances. A USDA loan would be possible without a credit exception from September 16, 2027.

VA rules say a previous foreclosure doesn’t disqualify you on its own; the lender weighs it the same way as a bankruptcy. If the earlier loan was a VA loan and the VA paid a claim, though, that entitlement can’t be restored until the loss is repaid — see [using a VA loan twice](https://mortgage-math-us.com/blog/using-a-va-loan-twice/).

## Your dates, worked out

Here is the earliest date each program would consider a new loan for someone whose Chapter 7 bankruptcy was discharged on June 2, 2025.

*Earliest dates after a Chapter 7 discharged June 2, 2025*

| Loan | Standard | Earlier, if |
|---|---|---|
| Fannie Mae conventional | June 2, 2029 | June 2, 2027 with documented extenuating circumstances |
| VA | June 2, 2027 | June 2, 2026 if credit is re-established and the cause was beyond your control |
| USDA guaranteed | June 2, 2028 | Sooner only with a lender credit exception or an automated Accept |

The first program that opens up in this case does so on June 2, 2027. Fannie Mae measures to the date the new loan is disbursed (on manually underwritten loans) and USDA to the date you apply, so allow for the weeks between application and closing. These are program minimums: individual lenders can be stricter, and a pre-approval only follows if the rest of the file — income, debts and a rebuilt credit history — works too.

## Extenuating circumstances: what counts

Fannie Mae defines extenuating circumstances as **nonrecurring events beyond your control** that caused a sudden, significant and prolonged drop in income or a catastrophic rise in financial obligations. The documents it gives as examples — a layoff notice, severance papers, medical reports and bills, a divorce decree — show the kind of events that fit.

By that definition, events within your control don’t qualify, and you must show you had no reasonable option other than to default. The lender has to document the claim:

- papers confirming the event, such as a layoff notice, medical records or a divorce decree;
- evidence of why you couldn’t solve the problem, such as insurance papers, listing agreements on a home you tried to sell, or tax returns from before, during and after a job loss;
- a written explanation from you showing you had no reasonable option other than to default.

USDA uses similar language — temporary, beyond your control and unlikely to recur — and lets the lender approve an exception without sending it to USDA. VA’s rules ask the same question when a bankruptcy is between 12 months and 2 years old.

> **Note: Shorter isn’t always cheaper**
>
> Coming back early with extenuating circumstances usually means manual underwriting or tighter limits, like Fannie Mae’s 90% loan-to-value cap after a foreclosure. Waiting a little longer can mean a lower rate and more loan options.

## What to do while you wait

The waiting period is the minimum, not a guarantee. Lenders also want to see that you have re-established credit and a clean payment record since the event. Use the time:

**How to prepare for a mortgage after bankruptcy or foreclosure**

1. **Get your papers together** — The discharge or dismissal order, the bankruptcy schedules, the foreclosure or short-sale settlement and, if it applies, every document for extenuating circumstances.
2. **Check your credit reports** — Make sure discharged debts show a zero balance and the dates are right; a wrong date can add months to your wait.
3. **Rebuild with small, regular credit** — One or two accounts paid on time every month, with low balances, show the payment history lenders look for. Our [credit score guide](https://mortgage-math-us.com/buying/credit-score/) shows how scores affect pricing.
4. **Keep rent and every bill on time** — A late payment after a bankruptcy is hard to explain away.
5. **Save a down payment and reserves** — Money in the bank offsets risk in underwriting and may be required, as with the $30,000 minimum down in the foreclosure example.
6. **Talk to a HUD-approved housing counselor** — Free or low-cost help with budgets and credit; call 800-569-4287 for a referral.

## When you apply

Tell the lender about the bankruptcy or foreclosure up front; it is on your credit report and the application asks about it. Expect to provide the court documents, a letter of explanation and evidence of your payment history since. Ask which program and which underwriting route — automated or manual — the lender plans to use, because the waiting periods and documentation differ.

Then run the numbers like any other buyer: the [affordability calculator](https://mortgage-math-us.com/tools/affordability-calculator/) shows what your income supports, and our guides to [VA loans](https://mortgage-math-us.com/loan-types/va-loans/) and [USDA loans](https://mortgage-math-us.com/loan-types/usda-loans/) cover the programs with the shortest waits.

## Frequently asked questions

### How long after a Chapter 7 bankruptcy can I get a mortgage?

4 years from the discharge for a Fannie Mae conventional loan, or 2 years with documented extenuating circumstances. VA generally disregards a bankruptcy discharged more than 2 years ago, and USDA treats it as no longer adverse after 36 months.

### Can I get a mortgage while still in Chapter 13?

With VA and USDA loans, yes: VA and USDA can both approve a new loan after 12 months of on-time payments in the plan, with permission from the trustee or court. Fannie Mae’s waiting period only starts once the case is discharged or dismissed.

### How long after a foreclosure can I buy a house?

For a Fannie Mae loan, 7 years from completion, or 3 years with extenuating circumstances and a maximum loan-to-value of 90%. USDA treats a foreclosure as no longer adverse after 36 months; VA weighs it like a bankruptcy.

### Is a short sale better than a foreclosure for buying again?

For a Fannie Mae loan, yes: 4 years after a short sale or deed-in-lieu against 7 years after a foreclosure, and 2 years instead of 3 years with extenuating circumstances.

### What counts as extenuating circumstances?

Nonrecurring events beyond your control that caused a sudden, significant and prolonged loss of income or a catastrophic increase in obligations — a layoff or serious illness, for example. You need documents proving the event and a written explanation.

### When does the waiting period start?

On the discharge or dismissal date of the bankruptcy, or the completion date of the foreclosure, short sale or deed-in-lieu. Fannie Mae counts to the new loan’s disbursement date on manually underwritten loans; USDA counts to your application date.

## Sources

- [Fannie Mae Selling Guide B3-5.3-07](https://selling-guide.fanniemae.com/sel/b3-5.3-07/significant-derogatory-credit-events-waiting-periods-and-re-establishing-credit) — Fannie Mae waiting period after a Chapter 7 or Chapter 11 bankruptcy (from discharge or dismissal); Fannie Mae waiting period after a Chapter 7 or Chapter 11 bankruptcy, with documented extenuating circumstances; Fannie Mae waiting period after a Chapter 13 bankruptcy discharge (Aug 7, 2019)
- [U.S. Department of Veterans Affairs: Credit standards FAQ](https://homeloans.va.gov/CreditStandards/runtime/faq/020100000050.html) — VA: a bankruptcy discharged more than this long ago may be disregarded (Oct 29, 2026)
- [38 CFR 36.4340(g)(2)](https://www.ecfr.gov/current/title-38/chapter-I/part-36/subpart-B/section-36.4340) — VA: after a bankruptcy discharge within this period, approval is generally not possible; VA: during a Chapter 13 plan, months of satisfactory payments before a new loan can be considered (trustee or judge must approve) (Jul 16, 2026)
- [USDA Rural Development HB-1-3555, Chapter 10 (Attachment 10-A)](https://www.rd.usda.gov/sites/default/files/RD-SFH-3555CHAPTER10.pdf) — USDA guaranteed loan: a Chapter 7 bankruptcy discharged more than this long before application is not adverse credit; USDA guaranteed loan: a foreclosure, deed-in-lieu or short sale this long before application is not adverse credit; USDA guaranteed loan: months of a Chapter 13 plan with on-time payments before a new loan (plus court or trustee permission) (Mar 19, 2020)
- [HUD](https://www.hud.gov/stat/sfh/housing-counseling) — HUD housing counseling referral line (Oct 28, 2026)
- [Fannie Mae Selling Guide B3-5.3-07: Significant derogatory credit events — waiting periods](https://selling-guide.fanniemae.com/sel/b3-5.3-07/significant-derogatory-credit-events-waiting-periods-and-re-establishing-credit)
- [38 CFR 36.4340: VA underwriting standards (bankruptcy and foreclosure)](https://www.ecfr.gov/current/title-38/chapter-I/part-36/subpart-B/section-36.4340)
- [USDA Rural Development HB-1-3555, Chapter 10: Credit analysis](https://www.rd.usda.gov/sites/default/files/RD-SFH-3555CHAPTER10.pdf)
- [HUD: Single Family Housing Policy Handbook 4000.1](https://www.hud.gov/hud-partners/single-family-handbook-4000-1)

_General information, not financial advice._