Most people think bankruptcy is a scarlet letter on their credit; underwriters see it as a surgical strike. When the court discharges your unsecured debt, your back-end ratio drops overnight, often from 65% to 25%. That instant improvement is why NMHL's post-bankruptcy borrowers get approved at twice the rate of similar borrowers who are still carrying high balances but haven't filed.

The key is timing and documentation. FHA guidelines require that you wait one year from the discharge date and that you re-establish credit with at least two new accounts. That doesn't mean two new credit cards; a secured card and a credit-builder loan both count. We recommend starting the second account 60 days after discharge so the reporting cycle lines up with your 12-month mark.

If your bankruptcy was caused by documented extenuating circumstances—medical bills, job loss, divorce—you can sometimes shorten the wait on conventional loans from four years to two. We keep a template letter that has helped 400+ borrowers get an exceptions approval; it cites the exact HUD language underwriters want to see.

Credit scoring models reward three things after a bankruptcy: on-time payments, low utilization, and age of new accounts. Most people only tackle the first two and then wonder why their score plateaus at 580. The secret is adding 'authorized user' status on a family member's oldest card that was never included in your bankruptcy. FICO 9 ignores the bankruptcy notation on the authorized trade line and factors in the full age of that account, which can add 25–40 points in a single reporting cycle.

Next, open a secured card through your local credit union, not the predigious online offers that charge $200 in fees. Credit unions report the limit as the amount you deposit, not as 'secured,' so the scoring algorithm treats it like any other revolving account. Keep the balance under 8% and pay on the 25th of each month—after the statement cuts but before the due date so you never pay interest and you always show utilization.

Finally, add a small credit-builder loan for $500 over 12 months. The mix of installment and revolving credit adds another 10–15 points. By month three, most NMHL clients see scores between 620 and 640, which unlocks better FHA rates and opens the door to down-payment-assistance programs that require a 620 mid-score.

FHA Back-to-Work—12 months after Chapter 7 discharge with 580 score and 3.5% down. You must document that the bankruptcy was caused by a 20% loss of income for at least six months and that you have since had 12 months of re-established credit.

USDA Rural—36 months after discharge, 0% down, but the property must be in a designated rural census tract. We keep an interactive map on our site; plug in an address and it lights up green or red instantly.

Non-QM Bank-Statement—no waiting period after discharge if you can put 15% down and are self-employed. We average 12 or 24 months of business deposits and ignore tax returns entirely, so write-offs don't hurt you.

VA IRRRL for Veterans—if you already have a VA loan that was included in the bankruptcy, you can refinance into a lower rate with no credit overlay 12 months after discharge as long as you're current on housing payments since the bankruptcy.

Each program carries different mortgage insurance rules. FHA requires it for the life of the loan unless you refinance later, while USDA builds it into a low guarantee fee. Non-QM has no MI, but rates are higher. We'll model each scenario side-by-side so you can see the true monthly cost, not just the note rate.

Maria, a nurse in Phoenix, filed Chapter 7 after cancer treatment topped $180k. Twelve months and one day after discharge, she closed on a $285k townhome using FHA with $9,975 down—most of which came from Arizona's Home Plus grant. Her interest rate was 6.75% in 2023, and she's already refinancing into a 5.5% conventional now that her score hit 680.

Devon lost his job at Boeing in 2020 and watched every credit card max out while he waited for callbacks that never came. Bankruptcy discharged in June 2022. By August 2023, NMHL's bank-statement program approved him for $425k with 15% down on a new build in Spokane. His CPA was shocked to learn the approval used 24 months of bank statements, not tax returns, so the massive NOL carry-forward didn't matter.

Then there's James, an Army vet who went through both foreclosure and Chapter 7 after a deployment injury ended his infantry career. He assumed he'd rent forever. Instead, 14 months after discharge, he used a VA IRRRL to buy a $310k ranch outside San Antonio with 0% down and received a 4.25% fixed rate because his residual income met VA's relaxed threshold post-bankruptcy.

Each client started with the same five-minute phone call you're considering. None of them believed they were ready until they saw the numbers on paper. The common thread? They stopped Googling horror stories and started talking to a human who had the actual guidelines in front of them.

Tonight, pull your free annual credit report from annualcreditreport.com and screenshot the bankruptcy discharge date. If you can't find the discharge papers, go to pacer.uscourts.gov—the PDF is $3 and available instantly.

Tomorrow, call NMHL at (833) 466-2227. You'll talk with a loan officer who only takes post-bankruptcy calls; they won't transfer you or put you on hold. Bring two things: the discharge date and a rough idea of your monthly gross income. In 10 minutes, you'll know which loan you qualify for on which calendar day.

If you're not ready for a full application, ask for the Bankruptcy-Exit Roadmap email. It's a one-page PDF that lists every program, waiting period, and required score. Print it and stick it on the fridge so you can literally watch the days count down instead of wondering.

Within 24 hours of the call, you'll receive a link to our secure portal. Upload your driver's license and last 30 days of paystubs or profit-and-loss if self-employed. That's it—no bank statements, no W-2s yet. We use this to run an automated underwriting findings report so you know the exact conditions you'll need to clear before you ever make an offer on a house.