How soon can you qualify for a mortgage after bankruptcy?

4 mins
Updated
May 1, 2025

The timeline for qualifying for a mortgage after bankruptcy can vary depending on the type of bankruptcy and the type of loan you’re applying for.

Types of loans

Conventional loans

For a conventional mortgage, most lenders require that you wait four years after a Chapter 7 bankruptcy discharge, though some may consider you after two years if you can demonstrate that you’ve made significant improvements to your credit and financial stability. For Chapter 13 bankruptcy, the waiting period may be two years after discharge.

FHA loans

FHA loans, which are backed by the Federal Housing Administration, offer a more lenient path for borrowers who have filed for bankruptcy. With an FHA loan:

  • Chapter 7 bankruptcy: You may qualify for an FHA loan as soon as two years after discharge.

  • Chapter 13 bankruptcy: If you’ve made all required payments under the repayment plan, you could be eligible for an FHA loan after one year of your repayment plan.

VA loans

VA loans, available to eligible veterans and active-duty military members, have similar guidelines to FHA loans. For a Chapter 7 bankruptcy, the waiting period is typically two years. For Chapter 13, the waiting period can be one year as long as the applicant has been making regular payments under the bankruptcy plan.

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Tips for buying a home after bankruptcy

Once you’ve rebuilt your credit and are in a better financial position, here are some additional tips for buying a home after bankruptcy:

  • Save for a larger down payment: The more you can put down, the better your chances of securing a loan, especially if your credit score is still recovering.

  • Consider a co-signer: If you’re struggling to qualify on your own, a co-signer with good credit may help increase your chances.

  • Shop around for lenders: Not all lenders have the same requirements. It’s worth speaking to a mortgage broker who can help you find lenders that specialise in helping people who have been through bankruptcy.

  • Consider a subprime lender: Some lenders specialise in high-risk borrowers, though be aware that these loans can come with higher interest rates and stricter terms.

Buying a home after bankruptcy is entirely possible, but it requires time, effort, and patience. By focusing on rebuilding your credit, demonstrating stable financial behaviour, and understanding the requirements of different loan types, you can increase your chances of qualifying for a mortgage. It may take a few years before you’re able to purchase a home, but with the right strategies in place, homeownership can be within reach again.

Disclaimer
Prepared by Beck McLean Finance Pty Ltd ABN 80 632 809 833. This information does not take your personal objectives, circumstances or needs into account. Always read the disclosure documents for products and services before deciding on a product or service, and consider seeking independent legal, financial, taxation or other advice for your unique circumstances.
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