Currently in Chapter 13

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    Hi Forum. We are currently nearing the end of year 4 of our 5 year chapter 13 bankruptcy. We have made all plan payments on time and all other payments since we entered the plan have been on time. I have great income and employment history (10 yrs at same employer on July 1, $80k/year). My question is if we’re looking to join NACA, is it too soon to expect to be able to purchase a home within the next 6 months? I wasn’t sure what the rules were around someone in a Ch 13 if all other factors looked good for home purchase. The price range we’re looking for would make our mortgage payment at or below our current rent and we do have about $7,000 in savings. We’re attending the workshop this weekend but I wanted to get a sense for exactly what the character based lending entails and if the lenders have a rule against someone in the midst of Ch 13. FHA allows you to apply after 18 months of on time plan payments so I’m hopeful NACA’s lenders have a similar rule. Thanks!


    Hello the4normans,

    To qualify under the NACA Purchase Plan, the Chapter 13 must be discharged. There is no waiting period beyond the discharge however. In fact, the BK13 payments may be used as an alternative line of credit if necessary for qualification.

    While FHA may allow you to qualify before discharge, you will also be paying a higher interest rate as well as PMI with the FHA loan. The decision you will need to make is whether waiting until the BK is discharged is worth the money you will save from the lower interst rate and not paying for PMI.


    Tim Trumble
    Online Operations, NACA

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