How to Use FHA Loans While in Chapter 13 Bankruptcy

The FHA is the Federal Housing Administration for the United States. The FHA gives federal assistance to qualified individuals who need a mortgage loan. Getting approved for an FHA loan while you are in Chapter 13 bankruptcy requires you to meet various criteria and produce specific documentation.

Difficulty:

Moderately Easy

Instructions

1. Pay all Chapter 13 bankruptcy payments in full and on time, for a minimum of one year. The FHA reviews all payments made. If you have been late or skipped a payment, they will not approve the loan.

2. Get written approval from the court trustee assigned to your case. This written document needs to be notarized and must be included with the FHA loan application.

3. Write a detailed explanation of why you filed for Chapter 13 bankruptcy and how you intend to pay the FHA loan off. Include this explanation with the application.

4. Check your credit report to see if good credit has been re-established. You can check your credit report online or ask your court appointed trustee for the information. Good credit has to be re-established for the FHA to approve your loan.

5. Stay with the same employer for at least six months. A stable work history gives you a better chance of paying off the loan.

6. Do not make any large purchases that will take three to five months to pay off before you apply for the loan. The fewer bills you have at the time of the application, the more likely the application will be approved.

7. Fill out the FHA application in detail. Provide all the needed documentation when you turn in the application.