Can You Buy A House After Bankruptcy in Kentucky?

Can You Buy a House After Bankruptcy in Kentucky? (Updated 2026 Guide)

Yes — you can buy a home after a bankruptcy in Kentucky. The key is understanding the timelines for each loan program, rebuilding your credit, and showing stable financial behavior after your discharge or dismissal.

Below is the 2026 Kentucky-specific guide to FHA, VA, USDA, and Conventional loans after Chapter 7 or Chapter 13 bankruptcy.

How Soon Can You Buy a Home After Bankruptcy?

Your waiting period depends on:

• The type of bankruptcy (Chapter 7 or Chapter 13)
• The loan program (FHA, VA, USDA, Conventional)
• Whether the bankruptcy is discharged or dismissed
• Your new credit history and debt management

Most Kentucky homebuyers qualify again between 1–4 years after bankruptcy.

2025 Waiting Periods After Chapter 7 Bankruptcy

Loan Type	Waiting Period After Chapter 7 Discharge
FHA	2 years from the discharge date
VA	2 years from the discharge date
USDA Rural Housing	3 years from the discharge date
Conventional (Fannie Mae/Freddie Mac)	4 years from the discharge date

Tip: If your Chapter 7 bankruptcy included a home foreclosure, that may extend your waiting period depending on the loan program. Let me review your full history so I can tell you exactly where you stand.

2026 Waiting Periods After Chapter 13 Bankruptcy

Loan Type	Waiting Period After Chapter 13
FHA	1 year of on-time plan payments with Trustee approval — OR 2 years after discharge
VA	1 year of plan payments with Trustee approval — OR 2 years after discharge
USDA	1 year of on-time payments with Trustee approval — OR 3 years after discharge
Conventional	2 years after discharge — OR 4 years after dismissal

Good news: Many Kentucky buyers in Chapter 13 qualify while still in repayment with a simple letter from their Trustee.

Kentucky FHA Loans After Bankruptcy

An FHA loan is often the fastest path back to homeownership after bankruptcy for Kentucky first-time buyers. FHA is flexible with credit scores, previous hardship, and higher debt-to-income ratios.

• Minimum credit score usually 580+
• Low 3.5% down payment
• Gift funds allowed
• KHC Down Payment Assistance can be used with FHA

FHA is often the best option for buyers rebuilding credit after Chapter 7 or Chapter 13.

Kentucky VA Loans After Bankruptcy

VA loans are extremely forgiving for eligible military borrowers. In 2026, the VA still allows homeownership again as early as:

• 2 years after Chapter 7 discharge
• 1 year into a Chapter 13 with Trustee approval

VA loans also require no down payment and no monthly mortgage insurance — making them a major win for recovering credit profiles.

Kentucky USDA Rural Housing Loans After Bankruptcy

USDA is stricter about credit history, but still very doable after bankruptcy:

• 3-year wait after Chapter 7
• 1 year into Chapter 13 with Trustee approval

USDA is a 0% down program designed for rural Kentucky counties. Income limits and property-eligibility maps apply.

→ Click here to check if a Kentucky property is USDA-eligible

How to Rebuild Credit After Bankruptcy (Quick Wins)

• Use a secured credit card and keep balances below 10–20%
• Pay every bill on time
• Avoid new personal loans or auto loans
• Dispute inaccurate items on your credit report
• Keep your credit usage low — this matters more than you think

Your goal is to show 12–24 months of clean, stable credit behavior.

Kentucky First-Time Homebuyer Options After Bankruptcy

You can still use:

• KHC Down Payment Assistance
• FHA Loans
• VA Loans
• USDA Rural Housing Loans

If you’re not sure which program is best, I can review your entire profile — credit, income, job history, debts — and map out your fastest path to getting approved.

Get a Free Kentucky Mortgage Assessment

If you’ve had a bankruptcy and want to buy again in Kentucky, reach out and I’ll build a personalized roadmap for you.

Call/Text: 502-905-3708
Email: kentuckyloan@gmail.com
Website: www.mylouisvillekentuckymortgage.com

I’ve helped more than 1,300 Kentucky families purchase or refinance — including hundreds rebuilding after bankruptcy.

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Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA
NMLS #57916 | Company NMLS #1738461
Equal Housing Lender | This is not a commitment to lend. All approvals subject to credit, income, property, and underwriting guidelines.

Bankruptcy Mortgage Loans in Kentucky | FHA, VA, USDA & Conventional Guidelines for Chapter 7 & 13

Bankruptcy Mortgage Loans in Kentucky | FHA, VA, USDA & Conventional Guidelines for Chapter 7 & 13

Looking for a mortgage loan in Kentucky after bankruptcy? Whether you’ve filed Chapter 7 or Chapter 13, you may still qualify for FHA, VA, USDA, or Conventional (Fannie Mae) loans.

In this video, Joel Lobb, Kentucky Mortgage Expert with EVO Mortgage, breaks down the waiting periods, loan program requirements, and real options available to Kentucky homebuyers — even after bankruptcy.

✅ FHA – 2 years after Chapter 7, 1 year into Chapter 13

✅ VA – 2 years after Chapter 7, 1 year into Chapter 13

✅ USDA – 3 years after Chapter 7, 1 year into Chapter 13

✅ Conventional – 4+ years depending on discharge or dismissal

🏡 Serving all of Kentucky including Louisville, Lexington, Owensboro, Bowling Green, and rural counties.

📞 Call/Text: (502) 905-3708

📧 Email: kentuckyloan@gmail.com

🔗 Learn more: MyLouisvilleKentuckyMortgage.com

Equal Housing Lender | NMLS 57916 | EVO Mortgage NMLS 1738461

Conventional Mortgage Guidelines for Kentucky

Freddie Mac and Fannie Mae Underwriting Guidelines for Mortgage Approval

These are called conventional because they must conform to the Freddie Mac and Fannie Mae standards set by the government, but they are not government insured. This poses a greater risk to lenders because they are not guaranteed repayment in the event the loan defaults; rather, they are forced to take a personal loss.

For these reasons, conventional mortgages are more difficult to obtain with stricter lending requirements in regards to credit score, down payment, debt to income ratio, mortgage insurance  and previous bankruptcies or foreclosure.

 Let's take a look at each subject below:👇

Credit Scores: 

Fannie Mae and Freddie Mac Require a minimum 620 credit score.

You have three credit scores from Experian, Equifax, and Transunion, and they take the middle score, throwing out the high and low score. The higher the credit score the better pricing you will get on the rate and mortgage insurance along with your down payment.
Ideally for higher credit score buyers, say over 680, and with at least 3% down payment with a low debt to income ratio.

Down Payment:  

Conventional mortgage loans require a minimum of 3% down payment. The more you put down, the better the rate, lower the mortgage insurance, and greater chances of getting approved.

If you put down 20%, then you will not have to pay mortgage insurance, or if you refinance an existing loan that has mortgage insurance, you can potentially get rid of the mortgage insurance if your equity position is less than 20% of the home's value.

Debt to Income: 

Conventional Mortgage loans typically will not allow for a back-end ratio of over 45%. They're two ratios, the front-end and back-end ratio. The front-end ratio is a percentage of the total house payment of your total gross monthly income. The back-end ratio is the new total house payment along with the monthly payments on your credit report divided by your total gross monthly income.

For example, if you make $3,000 gross a month, your total backend ratio would me maxed out at 1,350 a month. So if you had $300 in monthly payments on the credit report, this would allow for a maximum house payment of $1,050.00

Mortgage Insurance:

 Mortgage insurance is typically cheaper and less expensive on conventional mortgage loans. They're competing private mortgage insurance companies competing for the business with the names of MGIC, Radian, Essent, Genworth and Ugcorp.

 Conversely, it is not like Government insured FHA, VA and USDA  mortgage loans where all applicants get the same premiums regardless of credit score, down payment and debt to income ratio. Mortgage insurance is usually expressed as a monthly premium, with no upfront mortgage premiums like FHA, VA, and USDA government loan programs.

The higher the credit score, lower debt to income ratio and more nd can be removed once you reach 80% equity position in the home.

Bankruptcies and Foreclosure: 

Bankruptcy (Chapter 7 or Chapter 11)

A four-year waiting period is required, measured from the discharge or dismissal date of the bankruptcy action.

Exceptions for Extenuating Circumstances

A two-year waiting period is permitted if extenuating circumstances can be documented, and is measured from the discharge or dismissal date of the bankruptcy action.

Bankruptcy (Chapter 13)

A distinction is made between Chapter 13 bankruptcies that were discharged and those that were dismissed. The waiting period required for Chapter 13 bankruptcy actions is measured as follows:

• two years from the discharge date, or
• four years from the dismissal date.

.Foreclosure

A seven-year waiting period is required, and is measured from the completion date of the foreclosure action as reported on the credit report or other foreclosure documents provided by the borrower.

Deed-in-Lieu of Foreclosure, Pre-foreclosure Sale, and Charge-Off of a Mortgage Account

These transaction types are completed as alternatives to foreclosure.

• A deed-in-lieu of foreclosure is a transaction in which the deed to the real property is transferred back to the servicer. These are typically identified on the credit report through Remarks Codes such as “Forfeit deed-in-lieu of foreclosure.”
• A pre-foreclosure sale or short sale is the sale of a property in lieu of a foreclosure resulting in a payoff of less than the total amount owed, which was pre-approved by the servicer. These are typically identified on the credit report through Remarks Codes such as “Settled for less than full balance.”
• A charge-off of a mortgage account occurs when a creditor has determined that there is little (or no) likelihood that the mortgage debt will be collected. A charge-off is typically reported after an account reaches a certain delinquency status, and is identified on the credit report with a manner of payment (MOP) code of “9.”

A four-year waiting period is required from the completion date of the deed-in-lieu of foreclosure, pre-foreclosure sale, or charge-off as reported on the credit report or other documents provided by the borrower.

Joel Lobb (NMLS#57916)
Senior  Loan Officer

10602 Timberwood Circle Suite 3

Louisville, KY 40223

Text/call 502-905-3708

kentuckyloan@gmail.com

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If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/

How to Get Approved for a Kentucky Mortgage While in A Chapter 13 Bankruptcy:

Can you get a mortgage loan while in a Chapter 13 Bankruptcy?

Here is a brief summary:

You must have 12 payments paid into the Chapter 13 before you can apply for a mortgage loan.

The payments must be made on time for last 12 months or after 12 months if you have been in longer, so no late payments to the Chapter 13 while in it.

You have to ask permission from the courts to seek a mortgage loan. They usually grant this. I have never not seen them grant it.

You have to qualify with the new house payment along with Chapter 13 payments and other debts listed on credit report. Debt to income ratios usually center around 31 and 43% respectively, meaning the new house payment should not be more than 31% of your gross monthly income and your total house payment and debts listed on credit report along with Chapter 13 payment should not be more than 43% of your total gross monthly income.

Credit scores: Most FHA lenders I work with will want a 620-middle score. You have three fico scores from Experian, Equifax, and Transunion, and they throw out the high and low score and take middle score. For example, if you had a 598, 679, and 590 scores respectively for all three bureaus listed above, your qualifying score would be 598.

There are some FHA investors that I am set up with that will go down to 580, but I have seen in my past experiences 620 will get you a better deal and far greater chance of closing on your loan with FHA.

Down payment: For FHA loans, you will need to have at least 3.5% down payment saved up. It is extremely hard to find a no money down loan program to get you approved for a mortgage while you are in a Chapter 13 plan.

FHA, VA and USDA are really the only two options that I know of that offer financing for a borrower with a current Chapter 13 Bankruptcy plan, so keep that in mind.

Conventional loan program offered by Fannie Mae will not allow a mortgage loan for someone in a Chapter 13 Bankruptcy plan.

On USDA loans, it is possible to get 100% Financing after you have paid into the plan for 12 months with a good pay history. The credit scores needed for a USDA loan approval really need to be above 640 in my past experience in getting them approved. 

A lot of USDA lenders will say they will do down to 620, but it is very difficult getting them approved. Best to get your scores up to increase your changes in qualifying for a USDA loan. There is not much that difference in getting your scores up to that range if you are at a 620 score now.

With USDA loans, they have income and property eligibility requirements that FHA does not have, so below is a rough run down of FHA vs USDA loan for you:


Typically, USDA-eligible properties are located in rural areas. It is a mistake, however, to think that you have to live far out in the country to qualify for a USDA loan. USDA-eligible properties are often located near urban areas.

A property’s eligibility is determined by its location with respect to USDA’s map of eligible locations. The USDA program also places limits on your household income based on median earnings in an area. If you exceed that limit, you can’t obtain a USDA loan.

The FHA, by contrast, does not place limits on household earnings. The FHA, however, does establish a maximum limit on the amount of money that can be borrowed through the program.

So, if you were in a hurry to buy, after you have been in your Chapter 13 plan for 12 months, I can look at getting you approved to buy a home if you wish:

So, if you were in a hurry to buy, after you have been in your Chapter 13 plan for 12 months, I can look at getting you approved to buy a home if you wish:




If you have questions about qualifying as first time home buyer in Kentucky, please call, text, email or fill out free prequalification below for your next mortgage loan pre-approval.


Joel Lobb
Senior Loan Officer

(NMLS#57916)


Text or call phone: (502) 905-3708

email me at kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

How To Get Approved for A Kentucky FHA, VA, USDA, Mortgage Home Loan After A Bankruptcy?

How To Get Approved for A Kentucky FHA, VA, USDA, Mortgage Home Loan After A Bankruptcy?

Many debtors fear that a bankruptcy will close off any chance of getting a mortgage. But that’s simply not true, with a little time and proper planning you can get a mortgage with good interest rates.

Rebuild Your Credit

If you want to get a mortgage after bankruptcy, you’ll need to get busy rebuilding your credit right away. If you make sure your credit report accurately reflects your bankruptcy, all zero balance credit accounts are closed at the time of your discharge, and pay your credit bills on time you will begin to see some improvement in your credit score within 12 months of your discharge.

Here are some key tasks in rebuilding your credit:

• Get a secured credit card

• Credit Score
  

While the items on your credit report matter, you’ll also need to watch your FICO score. There are many different types of credit scores out there.  You have the individual credit bureaus scores (Experian, Trans Union, and Equifax), FICO scores, Vantage Scores, and industry specific scores. However when looking to purchase a home you will want to watch your FICO as it is used in an overwhelming majority of mortgage related credit evaluations.

Also it’s important to note that FICO changes the way they evaluate creditworthiness based on new information and changes in the market.  They have recently release FICO version 9. Since the majority of mortgage lenders still use an older FICO scoring model, when evaluating and monitoring your score, FICO recommends you use one calculated from a scoring model previous to Version 8.

When evaluating your FICO score it’s good to know that a score above 760 is considered excellent while a score under 620 is considered poor AND IT WILL BE HARD TO GET PRE-APPROVED WITH A CREDIT SCORE BELOW 580 RIGHT NOW

Timing

Typically speaking, if you want to get a mortgage after bankruptcy you’ll need to allow time to pass. For conventional mortgages you’ll need to wait four years after Chapter 7 bankruptcy or two years after Chapter 13 bankruptcy. But there are some other mortgage options that require a shorter waits.

FHA Mortgage

Two years after your Chapter 7 bankruptcy discharge you may apply for an FHA loan. If you filed Chapter 13 bankruptcy, then you’ll only need to wait until you’ve made twelve months of satisfactory payments, and you’ll need to get the approval of the bankruptcy trustee. But if you want to be given serious consideration, you’ll need to provide a clear explanation for why you filed bankruptcy. For example, maybe you filed Chapter 13 bankruptcy because you had a medical emergency and was unable to pay your medical bills.

VA Mortgage

If you’re a veteran, you can get a VA mortgage two years after your bankruptcy discharge. This VA application process can be challenging, but in some ways it’s more lenient since post-bankruptcy credit issues such as a foreclosure won’t restart the 2-year waiting period. However, credit issues after bankruptcy might affect your interest rate, so take care to keep your credit as clean as possible.

USDA Mortgage

If you live in a rural area, you may qualify for a USDA mortgage three years after your bankruptcy discharge. It’s important to note that while the USDA provides loans to rural residents it’s only for property that will serve as the borrower’s primary residence. The USDA will not finance the purchase of income property or a vacation home.

As you prepare to apply for a mortgage after bankruptcy, keep in mind that the mortgage lender will take into account the totality of your financial situation—your finances, credit history, credit score, and any extenuating circumstances.

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Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.

10602 Timberwood Circle 

Louisville, KY 40223

Company NMLS ID #1364

click here for directions to our office

Text/call:      502-905-3708

fax:            502-327-9119
email:          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

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Kentucky Bankruptcy Guidelines for Kentucky Conventional & Kentucky FHA Mortgage Loans

Can you buy a home while in bankruptcy in Kentucky?

KENTUCKY MORTGAGE WITH A BANKRUPTCY



Bankruptcy Chapter 7


Kentucky Fannie Mae Guidelines for a Previous Chapter & Bankruptcy:




4 years from discharge or dismissal date
2 years from discharge or dismissal date it borrower meets FNMA definition for Extenuating Circumstances
5 years if more than one bankruptcy was filed within the last 7 years


Kentucky FHA Guidelines for a Past Bankruptcy Chapter 7


2 years from the discharge date for DU approval. Case number assignment cannot be ordered until wait period has elapsed
Manual underwrites are allowed on a refer/eligible DU finding as long as 2 years has elapsed from the discharge date and the borrower has either re-established good credit or chosen not to incur any new credit obligations
Exception for 2 year wait period:
An elapsed period less than 2 years but no less than 12 months may be acceptable
The borrower must document the bankruptcy was caused by extenuating circumstances beyond their control such as a serious illness or death of a wage earner
The borrower must document an ability to manage their financial affairs in a responsible manner
Divorce, loss of a job, or inability to sell a home after relocation is not an acceptable extenuating circumstance


Bankruptcy Chapter 13


KY Fannie Mae Bk Guidelines for Chapter 13 Bk


2 years from discharge date
4 years from dismissal date
2 years from dismissal date it borrower meets FNMA definition for Extenuating Circumstances 5 years if more than one bankruptcy was filed within the last 7 years


Kentucky FHA Mortgage Guidelines for Chapter 13


2 years from the discharge date for DU approval. Case number assignment cannot be ordered until wait period has elapsed
Manual underwrites are allowed 1 day after discharge date or at least 12 months of the payout period under the bankruptcy has elapsed at the time of case number assignment
Must receive a refer/eligible DU finding
Must have documentation of 12 months satisfactory payment history
Must have written permission from trustee to enter into new mortgage transaction