FHA or VA Loan after foreclosure on VA loan?

[bkbirdie]

Hi everyone,

I'm still in my Ch. 7 bankruptcy (should be discharged Feb. 5, 2010) and am still current on my mortgage, but I've recently decided that I must let it go. I've come to terms with renting an apartment for a few years before attempting to buy another home. I do like being a homeowner, but my problem was buying a house that needed a ton of work. This was my first house, and I've realized that I really need a newer home next time, as I am not handy and can't do any repairs myself. I ended up putting over $40,000 into this house since I bought it in 2007, and it STILL needs work, plus the value has decreased and now I'm upside-down. (Contractors are VERY expensive!) My main problem is that I bought it with 100% financing through GMAC and the VA. Is it possible to get a VA loan again, or at least an FHA loan? I'm sure that the VA will end up having to pay a claim. I have read on the VA website that I may have partial eligibility left, but I'm unsure what that means. Thank you in advance for any help.

[oldhack]

Everybody becomes eligible again, if you do your time and do it wisely. That's why the Founding Fathers insisted on a right to bankruptcy in the Constitution (Article 1, Section 8, Clause 4)!
Anyway, FHA will consider you again 2 years after a Chapter 7, but that lengthens to 3 years (from the date the deed is written out of your name, after sale) from foreclosure. Conventional is longer, at least 4 years. I'm not sure about VA, but it's likely similar to FHA.
In the meantime, you MUST pay EVERY bill and contracted payment ON TIME! That is the most important thing that the FICO score and mortgage lenders will credit.
Sometime in the interim between now and then, you also should try to re-establish some credit lines. You'll need 3-5 in order to qualify for a mortgage. You DON'T, however, want to use them to the hilt! Keep utilizations low, and make ON-TIME payments.
Couldn't hurt, either, to spend some time learning how to use a wrench and a screwdriver.

[BobMango]

BKBirdie, if the VA takes a loss they will reduce your guarantee amount under reinstatement accordingly. Not sure what kind of hoops you have to jump through to get that reinstated, but it's worth checking out.

[bkbirdie]

Thank you, oldhack and BobMango. I hope that I'll have some partial VA eligibility left after all the dust has settled. I guess I'll cross that road when I get to it.

[tigergem]