Buying a Home After Bankruptcy · Updated September 2026
A bankruptcy doesn’t shut you out of homeownership in Kentucky. It starts a waiting period. FHA and VA buyers can often purchase two years after a Chapter 7 discharge, and Chapter 13 filers can sometimes buy while still in their plan. Here are the waiting periods for each loan program, how Chapter 7 and Chapter 13 differ, and what you can do now to be approved as soon as you’re eligible.
Mortgage waiting periods after bankruptcy (2026)
| Program | Chapter 7 | Chapter 13 |
|---|---|---|
| FHA | 2 years from discharge (1 year with documented extenuating circumstances) | Eligible after 12 months of on-time plan payments with trustee or court approval |
| VA | 2 years from discharge | Eligible after 12 months of on-time plan payments with trustee or court approval |
| USDA | 3 years from discharge | 12 months of on-time plan payments with trustee approval, or 1 year after completing the plan |
| Conventional | 4 years from discharge or dismissal (2 years with extenuating circumstances) | 2 years from discharge; 4 years from dismissal |
KHC loans follow the rules of the underlying FHA, VA, USDA or conventional loan. Lenders can add stricter requirements of their own.
Buying a home after Chapter 7
Chapter 7 wipes out eligible debts, usually within a few months of filing. The waiting period runs from the discharge date on your court papers, not the filing date. During the wait, lenders want to see:
- New credit established and paid on time. A secured card or a small installment loan works.
- No new late payments, collections or judgments since the discharge.
- Stable income and a manageable debt-to-income ratio.
Buying a home during or after Chapter 13
Chapter 13 is a 3- to 5-year repayment plan, and FHA and VA don’t make you wait until it ends. After 12 months of on-time plan payments, you can apply with:
- Written approval from your Chapter 13 trustee or the bankruptcy court to take on the new mortgage.
- A payment history from the trustee showing every plan payment made on time.
- A mortgage payment that fits your budget alongside your plan payment. Underwriters count the plan payment as a monthly debt.
These files are usually manually underwritten, so expect more documentation. FHA collection and judgment rules are below.
If your home was surrendered in the bankruptcy
If a mortgage was included in your bankruptcy and the home later went through foreclosure, the programs treat it differently. For conventional loans, the bankruptcy waiting period can usually apply with documentation showing the mortgage was discharged. For FHA, the 3-year foreclosure waiting period can apply and is generally measured from when the foreclosure was completed and title transferred, which can be well after the bankruptcy. Bring your discharge papers and any foreclosure records so we can pin down your eligibility date.
FHA rules for collections and judgments after bankruptcy
Debts that weren’t discharged in your bankruptcy, or new ones since, can still affect an FHA approval:
- Collections: non-medical collections don’t have to be paid off if they total less than $2,000. At $2,000 or more, they’re either paid off, put on a payment plan, or 5% of the balance is counted as a monthly debt in your debt-to-income ratio. Medical collections are ignored.
- Court judgments: must be paid off before closing, or you need a written payment agreement with the creditor and at least three months of on-time payments (you can’t prepay to meet the three months).
Extenuating circumstances
Some programs shorten the wait when the bankruptcy was caused by an event outside your control, such as a serious illness, the death of a wage earner or a job loss that wasn’t your fault. Divorce alone usually doesn’t qualify. You’ll need documentation of the event and proof that your finances have recovered.
Getting mortgage-ready after bankruptcy
- Get a copy of your discharge (or trustee payment history) and keep it handy.
- Check all three credit reports. Discharged debts should show a $0 balance and “included in bankruptcy.”
- Open one or two new accounts and pay them on time every month.
- Save for the down payment and closing costs, or plan to use a $0-down VA or USDA loan.
- Talk with a loan officer 6 to 12 months before your eligibility date so you’re ready to buy the day you qualify.
Score targets are in Kentucky credit score requirements. If your credit is still recovering, see bad-credit mortgage options.
Bankruptcy and mortgage FAQs
How long after Chapter 7 bankruptcy can I buy a house in Kentucky?
Two years from the discharge date for FHA and VA loans, three years for USDA, and four years for conventional loans. Documented extenuating circumstances can shorten the conventional wait to two years and the FHA wait to one.
Can I get a mortgage while I am still in Chapter 13?
Yes, with FHA and VA loans, and USDA in some cases. You need at least 12 months of on-time plan payments and written permission from your bankruptcy trustee or the court.
How long after a Chapter 13 discharge can I get a conventional loan?
Two years from the discharge date, or four years from the date of dismissal if the case was dismissed instead of discharged.
Does the waiting period start at filing or at discharge?
For Chapter 7 it runs from the discharge date. For Chapter 13, government loans look at your payment history during the plan, while conventional loans measure from discharge or dismissal.
What if my house was included in my bankruptcy?
If a mortgage was discharged in bankruptcy, conventional loans can usually use the bankruptcy waiting period with proper documentation. For FHA, the foreclosure waiting period can apply based on when the foreclosure was completed, which may be later than the bankruptcy.
What credit score do I need after bankruptcy?
The same minimums as any other borrower: 580 for FHA at most lenders, around 580 to 620 for VA, 640 for an automated USDA approval, and 620 for conventional. Re-establishing on-time credit after the discharge matters as much as the score.
Find out when you can buy again
Tell me a little about your situation and I’ll work out your exact eligibility date for each loan program and what to do in the meantime. It’s confidential and doesn’t affect your credit. Or call or text 502-905-3708.