After a Credit Event
Bankruptcy has a clock. It’s shorter than you think.
A bankruptcy, a foreclosure, a short sale, a loan modification — none of them ends your ability to get a mortgage. Each one starts a clock, and the folklore about how long that clock runs is years out of date. Some routes open at twelve months. One opens far sooner than that, with conditions worth reading twice.
Who this is built for
Anyone discharged from a bankruptcy
Chapter 7 or 13. The clock generally starts at discharge — not at filing, and not when the trustee closed the file.
Anyone who lost a home
Foreclosure, short sale, or a deed-in-lieu. The clock starts when the property actually transferred, which is often later than people assume — and occasionally earlier.
Anyone who modified a mortgage
A modification that forgave principal or interest is treated as an event by most lenders. One that only changed the rate or term usually is not. The paperwork decides.
Anyone told “come back in seven years”
That is the folklore. The programs on this page run on two-, three- and four-year clocks — and the strictest number on the page is 48 months, not 84.
The fastest way through this page is to say what happened and when it was final. The date decides almost everything, and it is usually not the date people expect.
Talk it throughThe question is never whether. It is when
A credit event does not close the shelf. It starts a clock — and six programs read that clock differently.
The range of answers here is wider than anywhere else in lending, so hard rules of thumb are mostly wrong in both directions. What is actually true:
One asymmetry worth knowing before the tables: investment property routes reopen differently than home routes. A rental can sometimes be financed sooner because the property’s rent carries the file — but the leverage is lower and the terms stricter. Nobody should pick a route from folklore, in either direction.
| The wait is real, but short | Twelve to 48 months | The first consumer route opens at 12 months. Full leverage — the same top tiers as anyone else — needs 48. |
| Time buys leverage | Each year moves the cap | The same borrower gains roughly five to ten points of loan-to-value at each rung: 12, 24, 36, 48 months. |
| Sooner exists, at a price | As early as one day | One investor route opens one day after a bankruptcy discharge — against a large equity cushion and a mandatory prepayment penalty. It exists for a specific situation, not as a shortcut. |
Ranges reflect several programs’ current materials. Seasoning requirements and leverage caps vary by program and change without notice. Not all applicants or properties will qualify.
How it actually works
Three things decide what you qualify for: what happened, when the clock started, and what you have rebuilt since.
The event gets dated
Not from memory — from paper. Discharge order, HUD-1 or deed, modification agreement. The date on that document is the date underwriting uses.
Time sets the leverage
The further you are from the event, the higher the maximum loan-to-value. At twelve months one route opens. At 24 more do. At 36 most restrictions fall away, and at 48 the top tiers come back.
Rebuilt credit gets verified
The strongest pattern is simple: tradelines paid as agreed for the last twelve months. One program is explicit that without two of them, the clock starts from a later date.
Everything else is a normal file
Income documented the way that fits you — including bank-statement routes — then appraisal, title, closing. The event changes the leverage, not the process.
Six programs, six answers
Six programs read the same event differently, so they are kept on six tabs — figures from different programs never combine, and each grid carries its own effective date. Read them as a sequence: the seasoned ladder, two programs who agree at twenty-four months, the investor clock, the one-day route with its conditions spelled out, and the grid for a file that has not finished recovering.
One alt-doc program — the same one behind many bank-statement files — publishes the clearest version of the clock. Purchase and rate-and-term figures:
| Time since the event | Maximum loan-to-value | Worth knowing |
|---|---|---|
| 12 – 23 months | 70% | Purchase and rate-and-term only — cash-out is not available this early |
| 24 – 35 months | 75% | All purposes open, including cash-out |
| 36 – 47 months | No event reduction | The program’s standard grid applies as if the event were not there |
| 48 months and beyond | Top tier available | The 85% tier requires a full 48 months of seasoning |
Read the first row again, because it is the one the folklore says cannot exist: twelve months after a bankruptcy discharge, on a primary residence, with income documented from bank statements if that is how you earn. The early rungs price higher than the later ones — each year since the event is worth real money, which is itself useful information when you are deciding whether to buy now or at month 36. That is a conversation, not a table.
Representative of one program’s alt-doc matrix, Rev 06/16/2026, primary residence, second home and investment occupancies. Maximum loan-to-value, minimum credit score and loan amount are separate limits; combinations shown only where they appear together in the source. Pricing differs by seasoning, credit and program. Not all applicants will qualify.
A second program runs nearly the same ladder, which is worth more than one program saying it alone. Their guidelines are also unusually clear about what counts as an event in the first place.
| Time since the event | Purchase | Refinance |
|---|---|---|
| 24 – 35 months | 75% | 70% |
| 36 – 47 months | Up to 80% | Up to 80% |
| 48 months and beyond | Up to 85% | Program maximums |
Their event list is the part worth reading slowly: bankruptcy, foreclosure, deed-in-lieu, short sale — and also a loan modification that forgave principal or interest, a single 120-day mortgage late, and a non-COVID forbearance. Two details in their rules decide real files. First, the clock’s starting point is specific: a bankruptcy runs from discharge; a foreclosure from the completed sale; a foreclosure that was inside the bankruptcy runs from the earlier of the two — but only if you can show two tradelines paid as agreed for the last twelve months. Without that rebuilt credit, the clock starts from the later completion date, which can quietly cost a year. Second, rolling late payments are not one event — each one counts separately. On this program, under 24 months the answer is not yet; the route that early is the seasoned alt-doc ladder, or one of the investor routes on this page.
Representative of a second program’s underwriting guidelines, revision 06/01/2026, and shown separately because figures from two programs never combine. This one caps at 85% at 48 months at the strongest credit tiers; leverage, credit minimums and loan amounts are separate limits shown only in combinations that appear together. Not all applicants will qualify.
A third program — from the mainstream shelf — now publishes its own event ladder. At month 24 it already prints the leverage the first ladder saves for month 48:
| The file, 24 months after the event | Maximum loan-to-value | Condition |
|---|---|---|
| Primary purchase — to $1 million | 85% | From a 720 score — the first ladder holds this rung for month 48 |
| Primary purchase — to $1 million | 75% | From 660 |
| Primary purchase — to $2 million | 75% | From 720 |
| Investment purchase — to $1 million | 80% | From 700 |
Two of its rules matter as much as the grid. First, housing-history tolerance: this program accepts two 30-day mortgage lates in the last twelve months and one 60-day in the last twenty-four — the wobbly-recovery pattern that follows real events, and one the stricter ladders decline. Second, the alt-doc columns run the same figures, so bank-statement income climbs the same rungs. The trades: the event still needs a full 24 months — this grid does not open the 12-month door the first ladder offers — ratios cap at 45%, cash-out is limited to $250,000 above 60% leverage, and reserves are a flat three months.
Representative of a third program’s product profile dated 08/03/2026, purchase and rate-and-term figures. Derogatory events require at least 24 months of seasoning; housing-history tolerances as stated in the source. Figures from different programs never combine. Maximum loan-to-value, credit score and loan amount are separate limits shown only in combinations that appear together in the source. Not all applicants will qualify.
On investment property, the rent carries the file — so a fourth program reopens the door earlier, at lower leverage. Their program is built specifically for files with a recent event in them.
| Time since the event | Maximum loan-to-value | Condition |
|---|---|---|
| 24 – 35 months | 65% | Any event type; purchase and rate-and-term |
| 36 months and beyond | Standard grid, up to 80% | As if the event were not there |
| First-time investor | 48 months required | On any event, regardless of leverage |
The same program tolerates two 30-day mortgage lates in the last twelve months at 65% leverage, accepts short-term rental income at slightly reduced leverage, and lends to LLCs. What it will not do: under 24 months, or a first-time investor with a fresh event. If the property does not cover its own payment, this route thins out quickly — that is what the coverage ratio is for.
Representative of a fourth program’s investor matrix effective 07/20/2026. Business-purpose loans on investment property; occupancy of the subject property is not permitted. Leverage, credit minimums, loan amounts and coverage requirements are separate limits. Not all applicants or properties will qualify.
One program will write an investment-property loan one day after a bankruptcy discharge. No minimum credit score. No minimum coverage ratio. No reserves. Here is everything that sentence costs: leverage is a flat 55% — barely more than half the property’s value — and at least $150,000 of equity must remain in the property after the loan, so smaller properties support smaller loans than the percentage suggests. It carries a mandatory five-year prepayment penalty at a flat 5% with no step-down and no buyout, which means the exit is expensive for five full years, by design. A foreclosure on the property itself still needs twelve months. It is investment-only, and in a declining market the leverage drops another ten points. This is not a rescue product; it is a specific tool for someone with substantial equity, a property that makes sense, and a reason not to wait — and part of my job is saying plainly whether that is you, or whether waiting twelve months for a seasoned ladder is the better trade.
Representative of a fifth program, Rev 08/03/2026. Business-purpose, investment occupancy only. The prepayment penalty is a condition of the program and cannot be waived or bought out. Figures from different programs never combine. Not all applicants or properties will qualify.
A sixth program prints a column for recoveries that have not finished recovering: a mortgage late as deep as 120 days inside the last year, priced instead of declined:
| The file | Maximum loan-to-value | Condition |
|---|---|---|
| The recent-event column — primary purchase | 70% | From a 620 score — one 120-day mortgage late inside the last twelve months, tolerated |
| The standard column — primary purchase | 80% | From 660, events settled 24 months — and even this history test tolerates lates short of 60 days |
| Second homes and rentals — purchase | 75% | From 660; 70% at 620; refinances run lower |
This grid is the bridge between the seasoned ladders and the one-day route: for the borrower who is neither fully seasoned nor sitting on a mountain of equity. The recent-event column is purchase and rate-and-term territory — cash-out stays closed while the history is that fresh — and the whole grid runs from a 620 score with bankruptcies, foreclosures, short sales and deeds-in-lieu at twenty-four months settled. Income documents the way the rest of this page does: a single year of returns, bank statements, 1099s or a profit-and-loss. A residual-income floor applies — the file must show real month-end room, not just a ratio.
Representative of a sixth program’s matrix effective 08/04/2026. Standard column requires no late over 59 days in the last twelve months; the recent-event column tolerates one late of up to 120 days as stated. Event seasoning of 24 months settled or discharged applies to both. Figures from different programs never combine. Maximum loan-to-value, credit score and loan amount are separate limits shown only in combinations that appear together in the source. Not all applicants will qualify.
Every ladder above runs one clock from “the event”. One program splits it — and once you see the split you cannot unsee it, because a deed-in-lieu, a short sale and a loan modification are treated as a different kind of event from a bankruptcy or a foreclosure:
| The event, and how long ago | Maximum financing | Worth knowing |
|---|---|---|
| A deed-in-lieu, short sale or modification — under 12 months | 75% | Purchase; 70% on a refinance — on a home you live in, inside the first year |
| A deed-in-lieu, short sale or modification — 12 to 23 months | 80% | Purchase; 75% on a refinance |
| A bankruptcy or foreclosure — 12 to 23 months | 65% | The harder events carry the longer clock on this program |
| A bankruptcy or foreclosure — 24 to 35 months | 80% | Purchase; 75% on a refinance |
The first row is the one worth the whole page. Every other grid here starts at twelve months, and the only door earlier than that is the investment-only route two tabs back — flat 55%, five-year prepayment penalty, not a home you live in. This program takes a deed-in-lieu, a short sale or a modification inside the first year on a primary residence, at seventy-five percent. If you handed the keys back rather than being foreclosed on, or you took a modification and thought that ended the conversation for years, the clock you are counting is probably the wrong one. Two honest cautions with it: a bankruptcy or a foreclosure under twelve months is not eligible here at all, and this program’s twelve-to-twenty-three-month rung for those harder events is five points BELOW the first grid on this page — which is exactly why the right answer is to price the file rather than read a table. Bring me the discharge or completion date and I will tell you which clock you are on.†
Representative of one program’s published seasoning caps effective 07/27/2026, primary residence and second home, full documentation or bank statements. Figures are maximum combined loan-to-value; on a purchase with no subordinate financing that is the same as the loan-to-value. Refinance figures as stated. Florida carries a further reduction on this program and non-warrantable collateral will not take written verification of employment, 1099-only or profit-and-loss-only documentation. What counts as a modification is narrower than people assume — a rate-only change is generally not a housing event at all, while principal forgiveness is. Figures from different programs never combine. Not all applicants will qualify.
The investor rungs assume the rent carries the file — that page is here →
† And the far end of the clock is deeper than the first grid shows. From a separate program’s published caps effective 08/03/2026: at 48 months past the event, 90% financing on a purchase and 80% on a cash-out, to $3,000,000; at 36 months, 80% and 75% to $3,000,000; at 24 months, 70% either way to $2,000,000. Figures from different programs never combine.
When the clock actually starts
What to gather before we talk
The paper that dates the event
Discharge order for a bankruptcy. Closing statement or deed for a foreclosure, short sale or deed-in-lieu. The modification agreement if there was one.
Twelve months of clean tradelines
Two accounts paid as agreed — a car, a card, anything reporting. This is what restarts the clock at the earlier date and what underwriters read as the rebuild.
Housing history since the event
Twelve months of rent, documented. Canceled checks or bank statements if the landlord is private.
Income, the way you actually earn it
Tax returns if they work; bank statements, a CPA-prepared P&L or 1099s if they work better. The event does not force full doc — the alt-doc routes are open at every rung above.
Want the exact list for your file before you ever apply? Build your document checklist — the list changes with your answers, printable and yours to keep.
Where it wins — and the honest limits
Told straight, because this page is useless otherwise.
Six programs print a rung for a bankruptcy, a foreclosure, a short sale or a deed-in-lieu. None of them asks you to explain yourself into an approval — the date and the file decide it.
Two separate programs open at twenty-four months settled, and one of them reaches higher at that rung than the rest of this page does.
One grid tolerates a mortgage late as deep as 120 days inside the last year — priced at reduced leverage instead of declined outright.
Tax returns, bank statements, 1099s or a CPA-prepared profit-and-loss. The event does not force you onto a stricter documentation route than you would otherwise use.
The consumer routes open at 12 months. Anyone promising sooner on a primary residence is describing something this page would not put its name on.
Pricing steps down as seasoning builds. Sometimes buying at month 13 is right anyway; sometimes month 36 is the better trade. The math is short and worth doing before house-hunting, not after.
It is investment-only, half-leverage, with a five-year exit penalty. If it is the only route that fits, that is usually a signal to slow down, not speed up.
Two tradelines, twelve months, paid as agreed. Without them, clocks start later and doors open slower. If the rebuild has not started, that is step one — and it costs nothing.
Find out where your clock stands
The prequalification takes about six questions and handles a credit event honestly — it asks when, not whether. Or skip it and put the discharge order in front of me; I will tell you which rung you are on and what it is worth to wait one more year.
Questions people actually ask
Open the full Q&A — the clock, the seasoning, and what waiting one more year is worth ▾
+How soon after a Chapter 7 discharge can I buy a house?
One alt-doc route opens at twelve months from discharge on a primary residence, at reduced leverage and with cash-out excluded. At 24 months more programs open; at 36 most event restrictions fall away; the highest tiers require 48. The folklore says seven years — that is the waiting period for some conventional routes, not for this shelf.
+Is the clock different for a foreclosure than a bankruptcy?
Yes, and the difference is the start date. A bankruptcy runs from discharge; a foreclosure runs from the completed sale or transfer, which is often months after you left the property. If the foreclosure happened inside the bankruptcy, one program uses the earlier of the two dates — provided twelve months of rebuilt tradelines back it up.
+Does a loan modification count as a credit event?
Only some. A modification that forgave principal or interest, converted debt to a no-payment second, or moved secured debt to unsecured is treated as an event, with the clock running from the execution date. A modification that only adjusted the rate or extended the term generally is not. The agreement itself answers the question.
+I took a COVID forbearance. Am I seasoned?
One program’s event list explicitly says non-COVID forbearance — a pandemic-era forbearance is not automatically an event there. Treatment varies by lender and by how the forbearance was exited, so this one is worth a document review rather than an assumption.
+Can I buy a rental property sooner than a home?
Sometimes — the investor routes open at 24 months at reduced leverage, and one equity-heavy route opens one day after discharge at roughly half leverage with a mandatory five-year prepayment penalty. Sooner is not automatically better: the early investor rungs are priced and collateralized accordingly.
+Do I need a certain credit score since the event?
What matters most is the pattern: roughly two tradelines paid as agreed for the last twelve months. One program makes this explicit — without it, your clock starts from a later date. The score matters at the margins; the rebuild is what opens doors.
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Loan programs, explained honestly
Programs described are offered through third-party lenders, are subject to lender approval and full underwriting, and change without notice. Seasoning requirements, leverage caps, credit minimums and loan amounts are separate limits, vary by lender and program, and are never available in combination across programs. Figures reflect multiple programs’ current materials, each cited beside the table it supports. A prior bankruptcy, foreclosure, short sale or modification does not guarantee approval, and not all applicants or properties will qualify. This is not a commitment to lend. Equal Housing Opportunity.