Buying a Richmond-Area Home After Bankruptcy or Foreclosure: Waiting Periods by Loan Type

A bankruptcy or foreclosure on your record does not end the idea of owning a home in the city of Richmond, Chesterfield County or Henrico County. It does put a clock on it, and the length of the clock depends on the loan program, the type of event and whether you can document that something outside your control caused it. This guide walks through the waiting periods I could confirm on primary sources, states the date or version of each source, and tells you plainly which rules I could not verify.

What a waiting period measures, and what it does not

A waiting period is the minimum time that must pass between a credit event and the date a lender can approve a new mortgage under a given program. The start date matters as much as the length. Under Fannie Mae’s Selling Guide, section B3-5.3-07 (the version dated 08/07/2019 on the page I read), bankruptcy periods run from the discharge or dismissal date, and the lender must confirm that date from documentation. HUD’s FHA answer on bankruptcy (published 4/30/2024) counts from the discharge date to the date the FHA case number is assigned, not to the day you close.

A waiting period is also not the same as how long the event stays on your credit report. The Consumer Financial Protection Bureau says on its page about buying a home after foreclosure that foreclosure information generally stays on a credit report for seven years, and that it is possible to qualify for a mortgage after one. Some programs let you buy well before the item drops off, which is why the loan type matters so much.

Conventional loans: the Fannie Mae table

Fannie Mae’s guide sets two tracks for each event: a standard period, and a shorter one when there were extenuating circumstances. On the page I read, the figures were:

• Chapter 7 bankruptcy: 4 years from discharge or dismissal, or 2 years with extenuating circumstances.
• Chapter 13 bankruptcy: 2 years from the discharge date, or 4 years from the dismissal date. After a dismissal, 2 years with extenuating circumstances.
• Two or more bankruptcy filings within 7 years: 5 years from the most recent discharge or dismissal, or 3 years with extenuating circumstances.
• Foreclosure: 7 years from the completion date. With extenuating circumstances it drops to 3 years, but with added conditions: a maximum loan-to-value ratio of 90 percent and use limited to principal residence purchases and limited cash-out refinances.
• Deed-in-lieu of foreclosure or pre-foreclosure sale (short sale): 4 years from the completion date, or 2 years with extenuating circumstances.

A shorter period alone does not qualify you. The page also says credit counts as re-established only when the waiting period is met, the loan gets an acceptable automated underwriting recommendation (or meets the manual-underwriting credit score requirements), and the borrower has traditional credit as described in the guide’s traditional credit history section. Debts a bankruptcy did not discharge must be paid off or placed on an acceptable repayment schedule. Other conventional investors publish their own guides, and I did not read those, so this post does not state their rules.

FHA loans: what HUD says about bankruptcy

On bankruptcy, the HUD answer is specific. For a manually underwritten FHA loan, a Chapter 7 bankruptcy does not disqualify you if at least two years have passed since discharge at the time of case number assignment. During those two years you must have re-established good credit or chosen not to take on new credit obligations. A gap of less than two years but not less than 12 months can be acceptable if the bankruptcy was caused by extenuating circumstances beyond your control and you have since shown a documented ability to manage money responsibly. HUD also says that a bankruptcy discharged within two years of case number assignment sends the loan to a manual underwrite.

For Chapter 13, the same HUD page says you can qualify once at least 12 months of the pay-out period have elapsed, provided your payment performance over those 12 months has been satisfactory with every required payment on time, and you have written permission from the bankruptcy court to enter the mortgage transaction. If you are still in a plan, that court permission is the piece to raise with your attorney early.

I could not read the FHA foreclosure, short sale or deed-in-lieu text in the FHA handbook. That handbook is a very large document and the sections I needed did not load in the copies I could access, so I am not stating an FHA foreclosure period. Ask a lender for the current figure and the handbook section it comes from.

VA and USDA loans after a credit event

The VA does not use a credit score cutoff. On its credit standards page, the VA says a bankruptcy discharged more than 2 years ago may be disregarded. If it was discharged 1 to 2 years ago, the applicant needs to have re-established credit and the cause of the bankruptcy must be documented as beyond the applicant’s control, such as job loss or medical issues. If it was discharged less than a year ago, the page says it will generally not be possible to find satisfactory credit risk. The page expects a 12-month history of satisfactory payment. I did not find VA foreclosure or Chapter 13 timing on a VA page I could read, so those are not stated here. Our guide to VA loans in Richmond covers entitlement and funding fees.

The USDA Rural Development handbook is clearer. In HB-1-3555 Chapter 10, Credit Analysis (revised 08-05-25), a Chapter 7 bankruptcy discharged more than 36 months before submission is not considered adverse credit, and an earlier one needs a credit exception. A Chapter 13 plan completed less than 12 months before submission needs a credit exception, and a plan in progress needs on-time payments and written court or trustee permission. A foreclosure within the 36 months before submission is significant derogatory credit, and a short sale or deed-in-lieu closed within that same 36 months is likewise not clean. The USDA also has property-location and income rules that I did not research for this post.

Extenuating circumstances and the paper trail

Two programs I read tie a shorter wait to circumstances outside your control. HUD describes a bankruptcy caused by extenuating circumstances beyond the borrower’s control plus a documented ability to manage financial affairs responsibly. The VA gives job loss and medical issues as examples of a documented cause. Fannie Mae’s page provides the shorter periods listed above for extenuating circumstances. The excerpt of that page I retrieved did not spell out the full definition, so ask your lender how the current guide defines it and what proof it wants.

Expect to gather paper. The lender must confirm the discharge or dismissal date, and HUD says the lender must obtain the bankruptcy and discharge documents when the credit report does not verify the date. For a foreclosure, Fannie Mae’s page says the lender must obtain documentation of the completion date. For an extenuating-circumstances case, start collecting layoff letters, medical billing records or similar evidence before you apply, and keep a clean 12 months of on-time housing and installment payments, which is the pattern both the VA and HUD point to.

Re-establishing credit and what lenders weigh next

Passing the waiting period only gets you to underwriting. After that, the lender looks at your score, your debts against income and your savings. Our post on what lenders look at besides your credit score explains debt-to-income ratios, reserves and job history, and our guide to buying with bad credit is blunt about what helps and what does not. If your score is the issue, see what credit score you need to buy a house in Richmond. You can test payment scenarios with our mortgage calculator.

The CFPB suggests weighing whether to wait and build your credit history before buying, since waiting could mean better loan terms and lower costs. A buyer who is eligible on day one of a waiting period is not always better off than one who waits six more months and qualifies for a lower rate.

A sensible order of steps for Richmond-area buyers

First, pull your credit reports and write down the discharge, dismissal or completion date of each event. Second, talk to a lender from our preferred lenders list and ask which program’s date you qualify under today. Third, if you are mid-Chapter 13, ask your bankruptcy attorney about court permission. Fourth, build a home search around what a program allows; our buyer process page shows how we work with buyers at each stage, and you can browse current listings to see what your target payment buys. The mix of closing costs, appraisal and underwriting still applies afterward, so read what underwriting asks for after contract too.

This guide is general information, not legal advice. For your situation, talk to a bankruptcy attorney about the bankruptcy and to a Virginia real estate attorney about the purchase contract and closing.

Frequently asked questions about buying after bankruptcy or foreclosure