The clock starts at the discharge or the transfer of title
Quick answer: A mortgage after bankruptcy is possible sooner than most people expect. FHA can consider a file two years past a Chapter 7 discharge. Fannie Mae generally wants four. After a foreclosure the gap is wider, three years for FHA and seven for conventional. Non-QM programs set their own clocks.
Almost everyone asks the wrong question first. They ask whether a bankruptcy or a foreclosure has ruined their chances. It usually has not. The real question is narrower and far more useful: which date is the clock counting from, and which rulebook is doing the counting. Those two answers decide whether you are eleven months away from a mortgage or three years away. Better still, they are published rules rather than judgment calls. This guide puts the actual waiting periods in one place and names the source for each one. It also shows where a non-QM program genuinely shortens the wait instead of just claiming to.
Key takeaways
- Two rulebooks, two very different answers. On a Chapter 7 bankruptcy, FHA looks for two years past the discharge date. Fannie Mae requires four. Same borrower, same paperwork, a two year difference in when you can buy.
- Foreclosure is the long one. Fannie Mae requires seven years from the completion date of the foreclosure. FHA looks at three years from the date title transferred out of your name.
- The clock rarely starts where people think. It runs from the discharge or dismissal date on a bankruptcy, and from the transfer of title on a foreclosure. Not from the filing, and not from the day you moved out.
- Documented hardship can cut the wait roughly in half. Fannie Mae allows two years instead of four after a Chapter 7, and three years instead of seven after a foreclosure, where extenuating circumstances are documented. Extra conditions attach in the foreclosure case.
- A shorter wait is not a skipped underwrite. Non-QM programs sit outside the qualified mortgage definition, but the ability-to-repay rule in 12 CFR 1026.43 still applies to a consumer mortgage. Your income still gets verified with third-party records.
How soon can you get a mortgage after bankruptcy?
It depends entirely on which program you are being underwritten to, and the spread between them is wide. So the first job is to work out which rulebook applies to you, because the same discharge paperwork produces two different answers.
Conventional financing: four years, or two from a Chapter 13 discharge
Fannie Mae publishes its waiting periods in Selling Guide section B3-5.3-07. After a Chapter 7 or Chapter 11 bankruptcy the guide requires four years, measured from the discharge or dismissal date. Chapter 13 is treated differently, and more generously. There the wait is two years from the discharge date, or four years from the dismissal date.
That split is deliberate rather than arbitrary. A Chapter 13 discharge means you completed a multi-year repayment plan, so the guide treats part of the waiting period as already served. A dismissal means the plan was not completed, and the file goes back to the full four years.
One more rule catches people out. If you have filed more than once in the past seven years, the wait becomes five years from the most recent discharge or dismissal. Two separate people each having filed once is not a multiple filing, and the guide says so directly.
FHA financing: two years past the discharge
FHA is the shorter road for most people in this situation. HUD Handbook 4000.1 tells the lender to document the passage of two years since the discharge date of any bankruptcy. Inside that two year window the file is not automatically dead. Instead the lender downgrades it to a Refer and underwrites it by hand rather than scoring it automatically. That is a higher bar, but still a live path.
Because FHA counts from the discharge and Fannie Mae counts from the same date, the arithmetic is easy to run yourself. Find the discharge date on your paperwork, add two years for FHA and four for conventional, and you have both dates on a calendar.
How long is the waiting period after a foreclosure?
Longer, and the gap between programs widens. Fannie Mae requires seven years, measured from the completion date of the foreclosure action as reported on your credit report or in the foreclosure documents. FHA calls for a downgrade to manual underwriting if title transferred out of the borrower's name within three years of case number assignment.
Notice the measuring point in both cases. It is the completion of the foreclosure and the transfer of title, not the day the notice arrived and not the day you handed back the keys. Those dates can sit a year or more apart in Nevada, so the difference is worth checking rather than assuming.
A deed in lieu or a short sale is treated as its own category
These sit between a bankruptcy and a foreclosure. Fannie Mae applies a four year waiting period here. It runs from the completion date of a deed in lieu, a preforeclosure sale, or a charge-off of a mortgage account. FHA treats a deed in lieu the same way it treats a foreclosure, with a downgrade to manual underwriting inside three years of title transferring.
The guide also flags a practical problem worth knowing about. Creditors do not report deeds in lieu and short sales consistently. So the event may show up under a remark like "settled for less than full balance" rather than under an obvious label. If your credit report is vague about what happened, expect to be asked for the settlement documents.
Which program has the shortest wait?
Here are the published figures side by side. Every number in the agency columns comes from a rulebook you can download and read yourself. That is exactly why those two columns are precise and the third one is not.
| Credit event | Conventional, per Fannie Mae B3-5.3-07 | FHA, per HUD Handbook 4000.1 | Non-QM |
|---|---|---|---|
| Chapter 7 or Chapter 11 bankruptcy | 4 years from discharge or dismissal | 2 years from discharge, then a manual underwrite inside that window | Set by the individual program, not by an agency rule |
| Chapter 13 bankruptcy, discharged | 2 years from the discharge date | 2 years from discharge, with court permission required if not yet discharged | Program specific |
| Chapter 13 bankruptcy, dismissed | 4 years from the dismissal date | Treated under the same two year documentation rule | Program specific |
| More than one filing in seven years | 5 years from the most recent discharge or dismissal | Handled through manual underwriting | Program specific |
| Foreclosure | 7 years from the completion date | Downgrade to manual inside 3 years of title transfer | Program specific |
| Deed in lieu, short sale, or mortgage charge-off | 4 years from the completion date | Deed in lieu follows the same 3 year rule as foreclosure | Program specific |
| Where the rule is published | Fannie Mae Selling Guide, free to read online | HUD Handbook 4000.1, free to download | Nowhere public, because these are not agency loans |
That last row is the honest part, and it matters more than it looks. Any page that prints one confident non-QM waiting period is describing a single lender's program rather than a rule. Ask for the specific program guideline in writing before you plan a purchase around it.
What counts as extenuating circumstances?
Fannie Mae allows a materially shorter wait where the borrower can document that the event was driven by something outside their control. The reductions are substantial. A Chapter 7 drops from four years to two. A deed in lieu or short sale drops from four years to two. Multiple filings drop from five years to three. A foreclosure drops from seven years to three.
The foreclosure exception carries extra conditions between year three and year seven, and they narrow it considerably. The loan is capped at the lesser of 90 percent loan to value or the matrix maximum for the transaction. Only the purchase of a principal residence is permitted. Limited cash-out refinances are allowed for any occupancy type. Critically, second homes, investment properties, and cash-out refinances of any occupancy type are not permitted until the full seven years has elapsed.
The sentence worth remembering. Extenuating circumstances is a documentation standard, not a sympathy standard. The event has to be evidenced as beyond your control, and the file has to show credit re-established afterwards. A hard year on its own does not meet it.
Can you buy while still in a Chapter 13 plan?
Sometimes, and this surprises people. FHA's handbook contemplates a borrower whose Chapter 13 has not been discharged at the time of application. In that case the lender must verify one extra thing: that the borrower received written permission from the bankruptcy court to enter into the mortgage transaction. The payment history requirements still apply on top.
So the practical sequence runs through your bankruptcy attorney and the trustee before it runs through a lender. That court permission is a real document with a real timeline attached, and starting it late is the most common reason these files stall.
Where does a non-QM loan really shorten the wait?
This is where the marketing and the mechanics part company, so it is worth being precise.
A qualified mortgage is a specific regulatory category defined in 12 CFR 1026.43(e). To sit inside it, a loan has to clear a list of product tests. Payments must be substantially equal, with no negative amortization, no deferred principal, and no balloon. The term cannot exceed 30 years. Total points and fees cannot exceed a published ceiling, which for 2026 is 3 percent of the loan amount once the loan reaches $137,958. Under the general definition, pricing also has to stay within 2.25 percentage points of the average prime offer rate for a comparable first-lien transaction at that loan size.
The waiting periods are not in the regulation at all
Notice what is not on that list. There is no waiting period anywhere in the qualified mortgage definition. The four year and seven year clocks are Fannie Mae's rules for what it will buy. The two and three year rules are HUD's rules for what it will insure. They are investor and insurer eligibility standards, not consumer protection law.
That distinction is the whole answer. A non-QM program can look at a shorter window for a simple reason. It is not selling the loan to Fannie Mae and not asking HUD to insure it, so those particular rules do not bind it. What the lender does instead is price and underwrite the risk itself. If you are weighing that route, our guide to non-QM home loans in Las Vegas covers the programs in detail. And if the purchase is a rental rather than a home to live in, the DSCR loans page covers the route that qualifies on the property's rent instead of your income.
Not sure which clock is running on your file? Updated August 26, 2026
Send the discharge date from your bankruptcy paperwork, or the date title transferred on a foreclosure, and the county the property sits in. A Valley West loan officer will put the published FHA and conventional dates on a calendar for you. You will hear which one your file is measured against, and whether waiting a few more months puts you in a better position. Ten minutes, no obligation.
Get your fast quoteDoes a shorter wait mean nobody underwrites the file?
No, and believing otherwise is how borrowers get blindsided at document collection. Non-QM describes which regulatory box a loan sits in. It does not describe how carefully the file gets reviewed.
Regulation Z applies its ability-to-repay rule to any consumer credit transaction secured by a dwelling. A short list of carve-outs sits at 12 CFR 1026.43(a), covering reverse mortgages, bridge loans of twelve months or less, and construction phases. A non-QM loan on a home you intend to live in is not on that list. So the lender still has to make a reasonable and good faith determination that you can repay. The rule then spells out the eight things that determination must weigh. Those include your income or assets, your existing debts, your debt-to-income ratio or residual income, and your credit history.
Bank statements are third-party records, which is the whole point
Here is the detail that resolves most of the confusion. Regulation Z requires verification using third-party records, and at 12 CFR 1026.43(c)(4) it lists examples of what qualifies. Financial institution records appear on that list explicitly, alongside tax returns, W-2s and payroll statements.
In other words, a bank statement program is not a loophole around documentation. It is a different documented path through the same rule. That is why these files often ask for twelve or twenty-four months of statements rather than fewer papers than a conventional file. Our page on how a bank statement income calculation actually works walks through the arithmetic.
The protections you keep either way
Two of them are worth knowing about, because they are frequently misdescribed. Take 15 U.S.C. 1640(a)(4) first. A lender that fails to comply with the ability-to-repay requirement can owe the sum of all finance charges and fees paid by the consumer, unless it shows the failure was not material. Then there is 15 U.S.C. 1640(k). A consumer can raise that same failure as a defense by recoupment or setoff in a foreclosure action, without regard to the usual time limit on bringing a damages claim. That limit runs three years for this class of violation.
There is also a rule that runs the other way from what most people assume about non-QM. Regulation Z permits a prepayment penalty on a consumer mortgage in one narrow case only: the loan is a qualified mortgage, it is not higher-priced, and its rate cannot increase. A consumer non-QM loan therefore cannot carry one. Business-purpose lending on a rental is a separate matter, because Regulation Z exempts it. Our page on DSCR prepayment penalties covers how step-downs work there.
A Henderson purchase, worked against the calendar
Abstract rules get clear fast once you put dates and dollars on them. Everything below is an illustrative example rather than an offer of terms, and the figures are program limits rather than anything specific to one borrower.
The starting facts. A Chapter 7 bankruptcy was discharged on March 14, 2023. The buyer is looking at a $700,000 house in Henderson today, August 26, 2026. Credit has been rebuilt and there are no new derogatory accounts.
The conventional clock. Fannie Mae wants four years from the discharge date, so the file clears on March 14, 2027. Counted from today that is 200 days away, or roughly six months and a half.
The FHA clock. HUD wants two years from the same discharge date, which passed on March 14, 2025. That is 530 days ago, so the bankruptcy is no longer the obstacle on an FHA file.
At which point a second constraint appears, and it has nothing to do with credit at all.
What the loan size ceiling does to the same purchase
The FHA loan size ceiling. Clark County sits at FHA's national low-cost limit, which HUD set at $541,287 for a one-unit property in 2026. That figure is 65 percent of the conforming limit, and Clark County is not on HUD's list of areas above the floor.
What that does to a $700,000 purchase. Subtract the ceiling from the price and $158,713 of the purchase price is simply outside what FHA financing can cover. That gap has to come from the buyer's own funds. It is a long way from what FHA's low down payment structure is built to do.
Now the conventional headroom. For 2026 the Federal Housing Finance Agency set the baseline conforming limit at $832,750 for one unit, and Clark County sits at that baseline. A first mortgage of $560,000 on this purchase sits $272,750 under the ceiling, so loan size is not a constraint on the conventional side at all. Only the calendar is.
| Route | Is the credit event still blocking? | Largest loan the program allows here | What decides it |
|---|---|---|---|
| FHA | No, cleared March 14, 2025 | $541,287 | Loan size, leaving $158,713 of the price uncovered |
| Conventional | Yes, until March 14, 2027 | $832,750 | The calendar, 200 days out |
| Non-QM | Program specific | Not tied to either ceiling | The individual program's own guideline |
Read that table as a decision rather than a ranking. Waiting 200 days makes the conventional route available and removes the loan size problem in one move. That is often the better answer, and it costs nothing to find out. But if the purchase genuinely cannot wait, the third column is why a non-QM program exists rather than a sign that something has gone wrong.
What to do while the clock runs
Fannie Mae does not just want the waiting period served. The guide also asks you to re-establish credit, and it names what that means. You need the waiting period and its conditions met, an acceptable automated underwriting recommendation or the applicable manual minimum credit score, and traditional credit history. It says plainly that nontraditional credit or a thin file is not acceptable here.
So the months are not dead time. They are the window in which the tradelines that will carry the file get established. If your score is the piece that needs work rather than the calendar, our guide to raising a credit score for a mortgage covers what actually moves the number. Our page on what underwriters check explains how a rebuilt file gets read. Buyers looking at the FHA route in particular will find how an FHA purchase in Clark County is put together on our FHA site.
Mortgage after bankruptcy FAQ
How long after a Chapter 7 bankruptcy can I get a mortgage?
It depends on the program. HUD Handbook 4000.1 tells an FHA lender to document the passage of two years since the discharge date. Inside that window a file can still proceed as a manual underwrite rather than an automated one. For conventional financing, Fannie Mae's Selling Guide section B3-5.3-07 requires four years from the discharge or dismissal date. Documented extenuating circumstances cut that to two. Both clocks count from the discharge date on your paperwork, not from the filing date.
Is the waiting period different for Chapter 13?
Yes, and it is shorter if the plan was completed. Fannie Mae requires two years from a Chapter 13 discharge date, against four years from a dismissal date. The guide explains the logic directly: a discharge means you already served part of the waiting period while completing the repayment plan. There are no exceptions permitted to the two year period following a Chapter 13 discharge, even for extenuating circumstances.
How long do I have to wait after a foreclosure?
Seven years for conventional financing, measured from the completion date of the foreclosure action as reported on your credit report. Fannie Mae allows three years where extenuating circumstances are documented. Conditions then attach between year three and year seven: a maximum of 90 percent loan to value, principal residence purchases only, and no second homes, investment properties or cash-out refinances until the full seven years has passed. On the FHA side, a foreclosure in which title transferred within three years of case number assignment triggers a downgrade to manual underwriting.
Does a non-QM loan skip the credit check?
No. Non-QM describes a regulatory category, not a lighter review. Regulation Z applies its ability-to-repay rule to any consumer credit transaction secured by a dwelling. At 12 CFR 1026.43(c)(2) it lists credit history as one of the eight factors a lender must weigh. A non-QM program is free to set its own seasoning window. That is because the four and seven year clocks belong to Fannie Mae, and the two and three year clocks belong to HUD, rather than to consumer protection law.
Can I use bank statements instead of tax returns after a bankruptcy?
Bank statements are a legitimate documentation path rather than a way around documentation. Regulation Z requires income verification using third-party records. At 12 CFR 1026.43(c)(4) it lists financial institution records among the qualifying examples, alongside tax returns and payroll statements. In practice a bank statement program often asks for twelve or twenty-four months of statements. So the file frequently runs heavier than a conventional one rather than lighter.
Can I get a mortgage while my Chapter 13 is still open?
It is possible on the FHA side. HUD Handbook 4000.1 addresses a Chapter 13 that has not been discharged before the mortgage application. On top of the payment history requirements, the lender must verify that the borrower received written permission from the bankruptcy court to enter into the transaction. That permission comes through your bankruptcy attorney and the trustee, and obtaining it takes time, so it is worth starting early.
What is the FHA loan limit in Clark County for 2026?
$541,287 for a one-unit property. HUD set the 2026 national low-cost area limit in Mortgagee Letter 2025-23, at 65 percent of the $832,750 conforming loan limit. It applies to case numbers assigned on or after January 1, 2026. Clark County does not appear on HUD's published list of areas above that floor. The conventional conforming limit for a one-unit property in Clark County is $832,750, which the Federal Housing Finance Agency announced on November 25, 2025.
Article history
- August 26, 2026. First published. Every waiting period verified against Fannie Mae Selling Guide section B3-5.3-07 and HUD Handbook 4000.1 read directly, rather than against secondary summaries. The 2026 qualified mortgage thresholds come from the Consumer Financial Protection Bureau's Official Interpretations to Regulation Z, at comments 43(e)(3)(ii) and 43(e)(2)(vi). Those comments carry the current dollar amounts that the regulation text itself defers to. The Clark County FHA figure comes from Mortgagee Letter 2025-23. We then cross-checked it against HUD's own list of areas above the floor, on which Clark County does not appear.
- August 26, 2026, pre-publication correction. An earlier draft of the qualified mortgage section quoted the loan amount thresholds printed in the body of 12 CFR 1026.43(e). Those are the unindexed base figures. Those are not the operative 2026 numbers. The regulation says so itself and points readers to the commentary. Both thresholds now carry the 2026 value of $137,958 and cite the commentary instead.
- Next scheduled review: the 2027 threshold adjustments, which the Consumer Financial Protection Bureau publishes after the preceding June's Consumer Price Index figures become available, and any republication of Fannie Mae Selling Guide section B3-5.3-07.
Find out which date your file is actually measured against
One conversation gets you the published FHA and conventional dates put on a calendar against your own paperwork. You also get an honest read on whether waiting is the better move. And you get a clear answer on whether a non-QM program solves a real problem in your case, or just skips a few months at a price.
Start your fast quoteAcross Valley West: Buyers taking the FHA route after a credit event will find the FHA program notes we keep for Nevada buyers rebuilding credit. Anyone whose next purchase is a rental can read the conventional and investor lending library instead. Home and hazard cover for the property itself is placed through our insurance agency.
Keep reading
- Non-QM home loans in Las Vegas: the full program guide
- How to vet a non-QM lender before you apply
- Why lenders quote 640 when FHA says 580
- What happens if you miss a mortgage payment
Sources
- Electronic Code of Federal Regulations, 12 CFR 1026.43, Minimum standards for transactions secured by a dwelling. The scope of the ability-to-repay rule at paragraph (a), the eight factors at (c)(2), the third-party record examples at (c)(4) including financial institution records, the qualified mortgage product tests at (e)(2), and the prepayment penalty conditions at (g).
- Consumer Financial Protection Bureau, Supplement I to Part 1026, Official Interpretations. Comment 43(e)(3)(ii)-1.xii gives the 2026 points and fees limits, and comment 43(e)(2)(vi)-3.v gives the 2026 price thresholds. Both reflect a 2.3 percent increase in the Consumer Price Index reported the preceding June 1.
- U.S. Department of Housing and Urban Development, Handbook 4000.1, FHA Single Family Housing Policy Handbook. The two year bankruptcy documentation rule. Also the three year foreclosure and deed in lieu downgrade rules, and the bankruptcy court permission requirement for an undischarged Chapter 13.
- HUD Mortgagee Letter 2025-23, 2026 Nationwide Forward Mortgage Loan Limits. The $541,287 one-unit low-cost area limit, set at 65 percent of the conforming limit, effective for case numbers assigned on or after January 1, 2026.
- Federal Housing Finance Agency, conforming loan limit values for 2026, announced November 25, 2025. The $832,750 baseline one-unit limit that applies in Clark County.
- United States Code, 15 U.S.C. 1640, Civil liability. Subsection (a)(4) carries the finance charges and fees remedy on an ability-to-repay failure. Subsection (e) sets the three year limit on that class of action, and subsection (k) allows recoupment as a defense to foreclosure.
- Fannie Mae Selling Guide B3-5.3-07, Significant Derogatory Credit Events, Waiting Periods and Re-establishing Credit. Every conventional waiting period quoted above, the extenuating circumstances reductions and their conditions, and the requirements for re-establishing credit.
This article is for general information and is not a commitment to lend, an offer of credit, a quote, a preapproval, or financial, tax or legal advice. Every scenario described is illustrative arithmetic only and is not an offer of specific terms. This page states no rate, no annual percentage rate, no monthly payment, no repayment term, and no discount point figure anywhere. The loan limits shown are published government program ceilings rather than terms being offered. Waiting periods are the eligibility standards that Fannie Mae and the U.S. Department of Housing and Urban Development publish for the loans they buy or insure. Those bodies can revise them at any time.
Individual lenders set their own non-QM guidelines, and nobody publishes them as public rules. So any statement about them here describes the category rather than a specific program. Bankruptcy and foreclosure carry legal and tax consequences beyond mortgage eligibility, so speak with your own attorney and tax adviser about your situation. Valley West Mortgage is an independent mortgage lender, NMLS #65506. Equal Housing Opportunity.
