Mortgage After Bankruptcy in Idaho: Chapter 7 & 13 Home Loan Guide

🏠 Getting a Mortgage After Bankruptcy in Idaho: What Buyers & Realtors Should Know

Mortgage after bankruptcy in Idaho isn't just possible - it's more common than most people think. Whether you’ve been through a Chapter 7 or Chapter 13, Idaho homebuyers can absolutely bounce back and qualify for a mortgage. You just need to know the rules, the waiting periods, and how to prepare. This guide walks buyers and realtors through everything you need to know.

This guide is your no-fluff, local breakdown of what it takes to get back on the path to homeownership after bankruptcy.

📕 Chapter 7 Bankruptcy: The “Clean Slate”

A Chapter 7 bankruptcy wipes away most unsecured debts, but it also comes with the longest waiting periods.

🕒 Waiting Periods:

• FHA or VA Loans: 2 years from discharge date
  –More information here about FHA Loans
  –More information about VA Loans

• Conventional Loans (Fannie/Freddie): 4 years from discharge

• USDA Loans: 3 years from discharge

👉 Important: Waiting periods begin at discharge - not the file date. So mark that calendar!

📋 What You'll Need:

• Re-established credit (no late payments post-discharge)
  -You have to re-establish credit, we recommend 2 credit cards, never more than $1000 limit, and charge $30 Per month, no more, and pay it off monthly.

• A solid employment history (especially for the past 2 years)

• Savings for down payment (FHA allows as low as 3.5%)

  • Need Down Payment Assistance, Idaho Housing had DPA Assistance, find out more here

• A written explanation letter (yep, underwriters read those)

📘 Chapter 13 Bankruptcy: The “Repayment Plan”

With Chapter 13, you're on a court-approved plan to pay off debts over time. And - good news - you don't necessarily have to wait until the bankruptcy is over.

🕒 Waiting Periods:

• FHA Loans: After 12 on-time payments with court approval

• VA Loans: Same as FHA - after 12 months with trustee permission

• Conventional Loans: 2 years from discharge, 4 years from dismissal

• USDA Loans: 12 months into repayment plan (with permission)

📋 What You'll Need:

• Trustee approval (for FHA/VA/USDA while still in repayment)

• Proof of on-time plan payments

• Clean credit since filing

• Verifiable income and debt ratios that fit loan guidelines

👨‍💼 Realtors: Here's What You Need to Know

• Timing is everything: Don't rule out clients who filed bankruptcy - they may already be eligible.

• Ask about discharge dates, not just “when did you file?”

• Partner with lenders who understand post-bankruptcy guidelines (hint: us 😊).

• Down payment programs like Idaho Housing may still be available.

🧠 Pro Tips for Borrowers:

• Check your credit early and often.
  -We recommend checking your credit report 60 days after discharge, in order to ensure all items are properly reporting.

• Start saving now - even small amounts help.

• Write a concise, honest letter explaining your bankruptcy - it matters.

• Don't open new credit right before applying for a mortgage.

💡 Final Thoughts

Bankruptcy isn't the end. It's a reset. And with the right steps - and the right lender - you can absolutely qualify for a mortgage in Idaho again. Whether it's FHA, VA, Conventional, or Idaho Housing, 1st Choice Mortgage is here to help you navigate the process with clarity and confidence.

📞 Call to Action:

If you or your clients are recovering from bankruptcy and wondering about your mortgage options, reach out to 1st Choice Mortgage today. We'll help you map out a smart, local plan.
👉 Let's Talk About It