Get VA Loan to Purchase A Home After Bankruptcy

The numbers of people declaring bankruptcy in the state of California has gone up significantly in the past few years in most part due to the economic recession and high unemployment rates.  There are also many veterans in this group of people that have declared bankruptcy in the past few years.  This post will talk about VA loan requirements after a Chapter 7 and Chapter 13 bankruptcy in the state of California.

The good news is that you don’t have to wait that long after declaring bankruptcy in California to qualify for a VA loan to buy a new house or refinance your existing house.  For a Chapter 7 bankruptcy you only have to wait two years from the bankruptcy discharge to apply for a VA loan in California, and only one year after a Chapter 13 bankruptcy.   A key point is to make sure you know the exact date of the discharge of the bankruptcy, not just the date you filed for bankruptcy.  It is from the discharge date that the one year wait to get a VA loan for Chapter 13 and the two year wait for Chapter 7 starts.

With a Chapter 13 bankruptcy you will have to get the court to OK you entering into a new mortgage and of course you will have to count any payments to creditors in your qualifications.  And you have to be on time with all of your payments in the Chapter 13.

A key part of VA guidelines after a bankruptcy is you must not have had any derogatory credit items after the bankruptcy discharge.  You cannot have any late payments, collections or judgments post bankruptcy or the VA loan underwriter will likely deny your loan.  Additionally, you must have re-established credit post bankruptcy and show that you have made payments on time. 

This means having for example car loans, student loans or credit cards after a bankruptcy and showing on time payments.

So I hope this article gives you hope that you can absolutely qualify for a VA loan in California after a bankruptcy.  Please give us a call at 858-922-7899 or if you would like to get approved for a VA loan in California or have any questions.

Here are some of most up-to-date highlights of VA loans in California:

  • VA loans are 100% financing zero down loans
  • VA mortgage loan rates are still hovering around 60 year lows
  • VA loan limits in California go up to $1 million in San Francisco, San Jose and much of the Bay Area.  VA loan limits in Los Angeles and Orange County go up to $697,000.  VA loan limits in San Diego go up to $537,750.  You can go above these loan limits by putting down 25% of the purchase price minus your counties VA loan limit
  • VA loan credit does not have to be perfect, give us a call as we are experts in helping VA borrowers increase their credit scores
  • You can get a VA loan 2 years after a bankruptcy, short sale or foreclosure

Rob Chomentowski


Sr. Loan Officer (and VA specialist)