Mortgage waiting periods after bankruptcy, foreclosure or short sale

The most common counting mistake is starting from the wrong date. People count from the day they filed bankruptcy, or from the day the foreclosure first showed up on their report. Most mortgage programs count from something later: the discharge, or the date the foreclosure, short sale or deed in lieu was completed.

The second mistake is assuming the waiting period is the whole requirement. It isn’t. Every program also expects you to have rebuilt acceptable credit by the time the wait ends, and individual lenders can add stricter rules, called overlays.

The waiting periods by program

The table below comes from each program’s own guide or published lender material. “EC” means documented extenuating circumstances. Where we could not confirm a rule against the program’s current text, the cell says so.

Sources: Fannie Mae Selling Guide B3-5.3-07; Freddie Mac’s November 2023 reminders for Caution risk class (manually underwritten) loans; USDA HB-1-3555 Attachment 10-A, revised August 5, 2025; VA’s credit standards FAQ and its 2023 Loan Guaranty Conference credit underwriting session. Each is listed with a link at the bottom of this page.

Why the FHA column says “check with lender”

FHA’s rules live in HUD Handbook 4000.1, which HUD updated again on August 12, 2026 (Update 18). We could not open the current handbook’s underwriting text to confirm the exact periods, so we’re not printing them as fact. Secondary sources such as Nolo describe FHA’s general rule as two years after a Chapter 7 discharge and three years after a foreclosure, with a possible reduction to about 12 months when the event was beyond your control and you’ve handled credit well since. Treat that as a starting point and confirm it with an FHA lender before you plan around it.

What starts each clock

Getting the start date right can move your eligibility by months.

• Bankruptcy: Fannie Mae, Freddie Mac, VA and USDA all measure from the discharge date (or the dismissal date for a dismissed case). The filing date drives your credit report, but these waits ignore it.
• Foreclosure: Fannie Mae and Freddie Mac use the completion date. USDA starts its 36 months on the date title transferred out of your name.
• Deed in lieu: Freddie Mac measures from the date the deed was executed; USDA from the date it was recorded.
• Short sale: Fannie Mae and Freddie Mac use the completion date, and USDA the closing date.

Fannie Mae’s guide adds that for manually underwritten loans, the waiting period ends on the new loan’s disbursement date. In other words, your new mortgage has to close after the wait ends. Applying early is fine; closing early isn’t.

A worked example: one discharge date, five answers

Say your Chapter 7 was discharged on March 15, 2024, and you don’t claim extenuating circumstances.

Same person, same discharge, and the answers spread across two years. With documented extenuating circumstances, Fannie Mae and Freddie Mac would both drop to two years, which lands on March 15, 2026.

How extenuating circumstances work

Fannie Mae defines extenuating circumstances as “nonrecurring events that are beyond the borrower’s control” that cause “a sudden, significant, and prolonged reduction in income” or “a catastrophic increase in financial obligations.” The lender has to document three things: the event itself (a layoff notice, medical bills, a divorce decree), why you couldn’t solve the problem another way (for example, a listing agreement showing you tried to sell), and a written explanation from you.

Fannie Mae’s foreclosure exception carries extra strings. Between years 3 and 7, the maximum loan-to-value is the lesser of 90% or the program maximum, and the loan has to be a principal-residence purchase or a limited cash-out refinance. No second homes, investment properties or cash-out refinances until the full seven years pass.

USDA handles this through credit exceptions. Its handbook says the lender must document that the circumstances were temporary, beyond your control and unlikely to recur. USDA doesn’t approve the exception itself; the lender owns that decision. VA’s version shows up in the 1-to-2-year bankruptcy window, where the cause has to be documented as beyond your control, such as job loss or medical problems.

Extenuating circumstances shorten a wait only when you can prove them on paper. A layoff letter, hospital bills or a death certificate does more than any explanation letter on its own.

When bankruptcy and foreclosure involve the same house

One sequence trips people up: the mortgage is included in a Chapter 7, and the lender forecloses months or years afterward. Under Fannie Mae’s rules, if the lender documents that the mortgage debt was discharged in the bankruptcy, it may apply the bankruptcy waiting period. Otherwise, the longer of the two periods applies. Freddie Mac’s Caution-loan reminders allow a similar approach, counting from the bankruptcy discharge with documentation. VA’s training material says the later of the discharge date or the foreclosure sale date sets the clock.

Keep your bankruptcy schedules and discharge order. They’re the documents that prove the mortgage was part of the case.

What the waiting period doesn’t cover

Clearing the wait only makes you eligible to be considered. Fannie Mae requires that by the end of the waiting period you have re-established traditional credit and either get an acceptable Desktop Underwriter recommendation or meet manual credit score minimums. VA generally looks for 12 months of satisfactory payments. Late payments after the event weigh heavily under every program, because they suggest the problem hasn’t been fixed.

Program rules are minimums. A lender can require a longer wait, a higher score or more reserves. If one lender says no, ask whether the reason is the program or the lender’s own overlay; another lender may read the same file differently.

What to do now

1. Find the exact discharge, completion, recording or title-transfer date on your documents.
2. Fill in your own row of the table above for the programs you might use.
3. If an event was beyond your control, start collecting the paperwork now, while it’s easy to get.
4. Use the time to add on-time history; our bankruptcy rebuilding guide lays out the first two years.
5. About six months before your date, ask a loan officer to review your file against the program and their own overlays. Our page on the credit score needed for an FHA loan covers the score side.