How long to wait after a bankruptcy ?

Question

BK was due to medical bills, and are healthy now.

Some say you have to wait 2 years before doing anything ?

Is it possible to get Private money / Conventional after a BK sooner?  And where to look ?

Seeking advice for : Duplex or Air B&B investment  Minneapolis area

Robin Simon · Answer

Generally, there are loan programs including DSCR that will allow you to qualify without much of a hit on eligibility (or even pricing) with a recent bankruptcy.  Generally, there are four categories of "credit events" that you would have to worry about:

1) Bankruptcy

2) Foreclosure

3) Short Sale

4) Deed-in-Lieu

Generally, if you have just one in the last four years or so (this differs from lender to lender), then you should be OK, but multiple will make you ineligible.  I'd start looking at DSCR Lenders right now if your credit is repaired and its just the one bnakruptcy

Tim Swierczek · Answer

Each loan program has its own minimum waiting period. The waiting period for "Agency" loan products will not vary based on the lender because the guidelines for those loans are set at a National level; no lender can change them. There is another category of loans called Non-QM. They are more flexible and, in some cases, offer loans 1 day after a BK.  In all cases, the details matter; some but not all of the details that will affect the answer are:Type of BK- Ch 7, 11, 13?Reason for BK- In your case, Medical, this is the best answer you can have and will open up some optionsDown payment %Occupancy of the new property

Property type

FICO Score

Amount of Reserves- This is your cash remaining after closing; it can include stock and retirement funds at a discounted amount. 1 Reserve = 1 Month payment on the primary residence

Some lenders will have even more factors, but these are the common ones.  The minimum waiting periods for Agency loans are as followsConventional

Ch 7- 4 years

Ch 13- 2 years if discharged/4 years if dismissed

FHA & VACh 7 - 2 yearsCh 13- 12 months of on-time payments with court approval

USDACh 7- 3 years

Ch 13- 12 months of on-time payments with court approval

Hit me up if you want to talk specifics

PS- I couldn't get the spacing to remain consistent; that was not intentional, it's on BP

Erik Estrada · Answer

You can still obtain a DSCR loan with a BK. Happy to chat

Mike Grudzien · Answer

Try DSCR

Stacy Raskin · Answer

You can do financing more quickly with DSCR loans. Conventional loans have a longer waiting period.

Thomas Knutson · Answer

can you add the existing Air B&B income to the family income for the calculation

Thomas Knutson · Answer

Have you heard of this group ?  https://app.kiavi.com/

Tim Swierczek · Answer

Yes, they are a hard money lender. Good for short-term loans like flips, or BRRRRs, but you need an exit strategy, and if that means keeping the property, you must have a path to a refinance loan before you start. Don't use them unless you a guarenteed a profitable sale or you already have a take-out loan you qualify for.

How long to wait after a bankruptcy ?

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