If you have good credit and the income to qualify for the amount of your new house, the VA loan process can take place immediately. You may contact an approved VA lender to process your loan application as soon as you determine that you meet the underlying VA loan credit requirements.
VA loan programs make home ownership much easier, particularly for first time homebuyers with less than perfect credit. VA underwriting is more understanding of the individuals and families who have had to file bankruptcy due to involuntary, unforeseen financial circumstances. The fact that you may have filed bankruptcy, or made arrangements with your creditors does not disqualify you from qualifying for a VA mortgage under the program’s credit guidelines.
The following conditions regarding bankruptcy or consumer services should help you determine your eligibility:
Chapter 7 Bankruptcy
Under this class of Bankruptcy, discharge is effective immediately. Qualification requirements are as follows:
- Discharged for at least one year: A VA loan can be applied for if the applicant or spouse were obliged to file Bankruptcy due to circumstances beyond their individual control (i.e., job loss, job transfer, or medical bills), and as long as credit has been satisfactorily re-established.
- Discharged for at least two years: A VA loan can be applied for if an applicant or spouse filed Bankruptcy for reasons other than in the scenario in number 1 above and can prove a discharge date at least 2 years old. Credit must have been re-established with NO lates, collections, or judgments in the meantime.
- If real estate was included in the Chapter 7 Bankruptcy, the discharge date must be at least 3 years old.
Chapter 13 Bankruptcy
Under this class of Bankruptcy arrangements will have been made to make monthly payments through a Trustee of the Bankruptcy Court. You may apply for a VA loan if:
- Twelve consecutive satisfactory monthly payments have been made, and
- Written permission is obtained from the Trustee that a VA loan may be applied for.
Consumer Credit Counseling (CCCS)
If an applicant or spouse has made arrangements with a consumer credit counseling service to pay monthly bills, a VA loan may be applied for under the following circumstances:
- Twelve month satisfactory payment history, and
- Written permission must be obtained from the “managing counselor”.