VA Home Loans After a Chapter 13 Bankruptcy

Obtaining a VA Home Loan following Chapter 13 is typically easier than with other types of bankruptcies. This type of bankruptcy shows an effort to pay off creditors, but the debt has been reduced through the bankruptcy filing. Payments are usually made to a court for a period of 2-5 years, and then the bankruptcy is completed.

If the veteran has completed all payments, then according to the VA guidelines, we may conclude that the veteran has re-established satisfactory credit. If 12 or more payments have been made satisfactorily, the VA lender may approve the loan, but the veteran must have permission from the Bankruptcy Judge or court appointed Trustee.

The underwriting requirements for a VA Home Loan following or during a Chapter 13 bankruptcy will naturally be a little stricter. More attention will be paid to the borrower’s current debt and income, and the proposed housing payment on a new loan. The lender is obligated to make certain that they do not place the veteran in a situation where they are unable to afford the new house payment.

A few of the many factors that are reviewed when determining whether an application will be approved or denied are as follows:

  • What are the circumstances that caused the Chapter 13 bankruptcy, and have they changed?
  • Is the veteran able to show they are able to meet the new housing payment, such as being able to verify they have a rental history that was close to the amount of the proposed new housing payment?
  • Has the veteran’s income been stable, and is it likely to continue or even increase?
  • Available liquid assets, (savings, checking, IRA’s, employee savings plans, etc.)
  • Current credit scores (This indicates how you are taking care of your present obligations)
  • The veteran’s proposed total monthly obligations including the new housing payment as a percentage of their income.

These and many other factors will be considered when determining whether or not an applicant is approved for a VA home loan following a Chapter 13 bankruptcy. Everyone has a different set of circumstances, and may be deficient in one or two of these areas, but have a really strong compensating factor to offset the deficiency.

The best and smartest move you can make is to contact one of our VA specialists who deal with prior bankruptcies, and tell them your story. The consultants at Florida Veterans Home Loans will be able to tell you in a very short time if you can qualify for a zero down VA home loan, and if not, what steps you can take to qualify later.

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To speak with Chris or one of his team of VA Home Loan specialists about taking the next step toward prequalification, call us at 866-704-2826 or complete our quick-and-easy request form. We'll be happy to contact you and discuss your next steps.

We look forward to assisting you.

By submitting your request, you are not obligating yourself. You are simply asking to be contacted by one of our talented specialists who can answer your questions. Florida Veterans Home Loans works exclusively with military families and we have helped people all across Florida understand the VA loan process.