Can I Buy a Home If I’ve Had a Foreclosure?

For many people, it has been a rough couple of years.  I’ve met and talked with many folks who have gone through some difficult times with jobs, money, marriage and their homes, all due to the economy.

Unfortunately, some people have lost their homes, or had to sell their home at a loss or through a short sale.  Maybe even declare bankruptcy.   But in Colorado, things seem to be getting a little better, and now I’m asked “can I buy a home if I’ve had a foreclosure or short sale?  What about bankruptcy?”

The short answer is yes, you will be able to buy a home again.  The ability to purchase really depends on what time of loan you will be getting and your borrowing history.  The National Association of Realtors came up with this chart and it gives a great overview of guidelines for borrowers.  Keep in mind, underwriting is now very strict, and good credit is a must!  Take a look at the chart below.  If you have any questions, call or email me, or I can put you in touch with good lenders that can look at your specific case.


  Fannie Mae and Freddie Mac Dept. of Veterans Affairs Federal Housing Administration
Foreclosure Seven years, but the lender will make exceptions at three years if extenuating circumstances are met such as job loss or death of a wage earner. Generally, not less than two years with foreclosures and bankruptcies filed under straight liquidation and discharge provisions. If the foreclosure was on a VA loan, the buyer must have paid the VA for its loss before qualifying for a new VA loan. Three years, but the FHA may grant an exception if the foreclosure was a result of serious illness or death of a wage earner and the borrower has reestablished good credit.
Chapter 7 or 11 Bankruptcy Four years (two years with extenuating circumstances). Under a Chapter 7, two years after the discharge with reestablished good credit or no incurred new credit obligations,
Chapter 13 Bankruptcy Two years from discharge date; four years from dismissal date. After making 12 months of payments to a court-appointed trustee and the trustee or the bankruptcy judge approves new credit. One year current on required payments to be considered.