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VA Loans After Bankruptcy or Foreclosure: What the Handbook Says

A bankruptcy or foreclosure in your history does not, by itself, disqualify a VA loan. VA says so in plain terms. What it does set is timing - and the rules are more forgiving than most Veterans are told, especially for a Chapter 13 still in progress.

Chapter 7

Discharged more than 2 years ago

Measured from the date of closing, for purchases and refinances, it may be disregarded.

Discharged 1 to 2 years ago

Possible only if both apply: you have used credit since and paid it satisfactorily over a continued period, and the bankruptcy was caused by circumstances beyond your control - unemployment, prolonged strikes, uninsured medical bills - and those are verified.

Discharged within 12 months

VA says it will generally not be possible to find you a satisfactory credit risk.

One detail worth knowing: VA states that divorce is not generally viewed as beyond the borrower's control. A bankruptcy driven by divorce falls back on the two-year rule.

A separate path exists when the bankruptcy came from the failure of a self-employed borrower's business. It can work if you took a permanent job after the business failed, there is no derogatory credit before the self-employment, none after the bankruptcy, and the failure was not due to your misconduct.

Chapter 13: you may not have to wait until it ends

VA reads a Chapter 13 as an effort to pay creditors, not a walk away from them. If you have finished all the plan payments satisfactorily, the lender may conclude you have re-established satisfactory credit.

And before it finishes: if you have satisfactorily made at least 12 months' worth of payments and the trustee or bankruptcy judge approves the new credit, the lender may give favorable consideration. That makes a VA purchase possible during an active Chapter 13, well before the plan ends.

Foreclosure, deed in lieu and short sale

The same structure applies. A foreclosure finalized more than 2 years before closing may be disregarded. Within 1 to 2 years, it needs both re-established credit since and circumstances beyond your control that are verified.

If a foreclosure, deed in lieu or short sale happened alongside a bankruptcy, the clock starts from the later of the bankruptcy discharge or the date title transferred. A long delay in the title transfer can push that date back, and the lender may need VA's regional loan center's guidance.

Timing only gets a file in the door; the rest still has to work. VA's measure of whether a family can carry the payment is on residual income, and how a higher ratio is judged is on VA debt-to-income. If you have been declined elsewhere on a past credit event, what to do after a denial sets out the order that helps.

Source: VA Pamphlet 26-7, Lender's Handbook, Chapter 4 Credit Underwriting, Topic 7 Credit History, Bankruptcy and Foreclosures (current version on KnowVA, updated August 26, 2026). VA figures change; confirm current tables before relying on them. Lenders may apply their own additional requirements. Not a commitment to lend.

VA bankruptcy and foreclosure FAQ

How long after a Chapter 7 bankruptcy can I get a VA loan?
VA may disregard a Chapter 7 discharged more than 2 years before closing. Between 1 and 2 years it is possible only with re-established credit and verified circumstances beyond your control. Within 12 months VA says it generally will not be possible.
Can I get a VA loan while in Chapter 13?
Possibly. If you have made at least 12 months of Chapter 13 payments satisfactorily and the trustee or bankruptcy judge approves the new credit, VA allows the lender to give favorable consideration.
How long after a foreclosure can I get a VA loan?
A foreclosure finalized more than 2 years before closing may be disregarded. Within 1 to 2 years it requires re-established credit and verified circumstances beyond your control. If it happened alongside a bankruptcy, the later of the discharge date or the title transfer date starts the clock.

You earned the benefit. Let's find the lender who honors it.

Tell us your situation - score, history, income, all of it. We will tell you honestly which VA lenders we work with are realistic for your file, and what the path looks like from here.