Can I get a Conventional Mortgage Loan after bankruptcy?

  • The minimum conventional loan credit score is 620-680+ depending on the program.
  • The interest rate is based on credit score, and 720+ obtains the best rate.
  • LTV requirements are based on credit score. Better scores have higher LTV limits.
  • Mortgage insurance requirements are driven off credit score and LTV.
  • Applicant can’t have late payments in the last year.
  • Applicant can’t have outstanding judgments in the last year.
  • At least two years must pass after Chapter 13 bankruptcy.
  • At least four years must pass after Chapter 7 bankruptcy.
  • At least four years must pass after foreclosure.
  • At least two years must pass after short sale with 20% down payment, four years with 10%, seven years with less than 10%.

Conventional mortgage loan requirements state that if you have been discharged from a Chapter 7 bankruptcy for four years or more, you’re eligible to apply. If you’ve had a Chapter payday loans in Oregon 13 bankruptcy, you must document that your credit reputation has been re-established for at least two years.

3. Property Requirements

Property requirements for conventional financing are easier to understand and comply with than other programs like FHA loans. For a property to be eligible, it must have a home appraisal performed by a licensed appraiser from the area. Conforming appraisal standards adhere to standards set forth by the Uniform Standards of Professional Appraisal Practice (USPAP).

Conforming appraisal requirements are also strictly regulated by the Home Value Code of Conduct (HVCC), which prohibits lenders or realtors from selecting or influencing appraisers in any way. Under HVCC rules, the appraiser is selected at random. Once selected, they perform a full appraisal of the subject property to determine its condition and its value.

The appraised value of a home is determined by using a combination of the assessment of the property itself and also by the recent value of comparable properties (comps) in the same area. Conventional mortgage loan requirements call for at least three comps to the subject property. For the property to qualify, the appraised value must return greater than or equal to the minimum loan-to-value requirements for the desired conforming loan program. Minimum LTV requirements for conforming loans are between 80% and 97%, depending on the program and mortgage insurance requirements.

What types of property are eligible?

Depending on the specific program, conventional mortgage guidelines allow you to purchase warrantable condos, planned unit developments, modular homes, manufactured homes, and 1-4 family residences. Conventional loans can be used to finance primary residences, second homes and investment property too.

4. Conventional Loan Limits

The maximum conventional conforming loan amount is $453,100 across most of the U.S. for single-family homes. Conventional loan limits are based on local home values and can vary depending on the area.

What is the maximum amount that I can borrow?

The maximum mortgage amount for conventional mortgage loans are determined by a couple factors. There is a maximum loan limit and a loan-to-value ratio (LTV Ratio) based upon the home’s appraised value. Here’s how those are calculated:

Maximum loan amount: The maximum loan amount allowed for an conventional conforming loan varies from county to county. The highest maximum conventional conforming loan for single-family homes is $871,450. The lowest maximum Conventional Mortgage amount available in any county is $453,100. To see what the limit is in your county, check at the link below. Conventional loan limits are listed for most U.S. territories and states.

Maximum financing: Depending on the state where the property is located, the maximum conventional mortgage loan-to-value ratio will be 80% – 97% of the official appraised value of the home or its selling price, whichever is lower.