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How to Get a Mortgage with a Chapter 13 Bankruptcy in Oregon (2025 Guide)
- Todd Davidson
- May 22
- 4 min read
Updated: Jun 2
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a court-approved repayment plan that allows you to pay back some or all of your debts over a period of three to five years. It's often considered the "wage earner's plan" because it lets you keep your assets, like a car or home, while catching up on missed payments.
Compared to Chapter 7, which wipes out most debts completely but can involve asset liquidation, Chapter 13 is seen more favorably by some lenders because you're actively repaying what you owe.
Can You Get a Mortgage During Chapter 13 bankruptcy?
Yes, but with restrictions.
While you're still in an active repayment plan, getting a mortgage is possible but challenging. Here's what you need:
Court Approval: You'll need written permission from the bankruptcy court to take on new debt.
On-Time Payments: Most lenders require at least 12 months of on-time payments into your Chapter 13 plan.
Proof of Stability: A steady income, a low debt-to-income ratio, and financial discipline will help your case.
FHA and VA Loans: These government-backed loans are more lenient and may approve borrowers in Chapter 13, with court approval.
💡 Tip: Work closely with your bankruptcy attorney and mortgage broker to navigate the process of getting a mortgage during Chapter 13 bankruptcy.
What About After Chapter 13 bankruptcy is Discharged?
Getting a mortgage after your Chapter 13 bankruptcy is completed—or even just dismissed—opens more doors. Here's what to expect:
Waiting Periods (Post-Discharge)
FHA Loans: No official waiting period after discharge, but many lenders still prefer a 12-month gap.
VA Loans: No mandatory wait after discharge (if you're eligible).
Conventional Loans (Fannie Mae/Freddie Mac): Typically require 2 years after discharge, or 4 years after dismissal.
💡 Tip: Timelines vary by lender for Chapter 13 bankruptcy. Just because one lender can't help you, another might be able to. So don't give up if the first lender you ask says no.
What Lenders Look For
Whether you're mid-bankruptcy or post-discharge, lenders will examine:
Credit Score: The higher, the better—but FHA loans may accept scores as low as 580.
Debt-to-Income Ratio (DTI): Ideally under 45%, though some lenders go higher.
Employment History: Stable income for at least two years is a big plus.
Down Payment: FHA requires as little as 3.5%; conventional loans may need more.
Affordability Calculator: To find out how much house you can afford CLICK HERE to check out our affordability calculator. Will show you a price range of homes you should be looking at based on your monthly income and debts.
Steps to Take Before Applying
Get a Copy of Your Credit Report – Ensure all debts are reported accurately.
Work on Credit Repair – Pay on time, keep balances low, and don't open new credit unless necessary.
Save for a Down Payment – The more you can put down, the better your loan terms.
Get Discharge Paperwork - This can take from 2-4 months after payment completion. The minute you complete payments, I'd recommend checking in with your lawyer to speed up the process (steps below):
Final Payment Completion: After you make your final Chapter 13 plan payment, the trustee does a final audit to ensure all creditors were paid correctly. This review can take 30 to 60 days.
Trustee's Final Report: Once the audit is complete, the trustee submits a final report to the court. This can take another 30 to 60 days depending on the complexity of your case and how quickly your trustee works.
Court Issues Discharge Order: After receiving the trustee's final report and confirming no objections, the bankruptcy court issues your discharge order. This can take 1 to 2 weeks after the trustee's report is accepted.
Get Pre-Approved by an experienced Loan Officer – Know what you can afford before house hunting as well as helps get your offer accepted.
Final Thoughts
Buying a home with a Chapter 13 bankruptcy in your recent past is not only possible—it's achievable with the right steps and guidance. The key is preparation, patience, and finding lenders who understand your financial journey.
Todd Davidson
Mortgage Loan Officer
P: 971-275-2465
About the Author:
AI and author knowledge were sources of info for this blog. The info was vetted, links to other resources included, and portions written by Todd Davidson, a seasoned professional in home ownership and mortgage financing. With a passion for helping individuals and families make successful transitions to new states and homes, Todd has become a prominent influencer in the industry. As a Mortgage Loan Officer with years of experience, Todd has guided countless clients through the intricacies of home financing, making their dreams of homeownership a reality.
As an author, influencer, and mortgage loan officer, Todd Davidson brings a wealth of knowledge and a genuine passion for assisting others in achieving their housing and moving goals. His dedication to the well-being of his clients and readers shines through in his work, making him a trusted resource for anyone embarking on the exciting adventure of home ownership.
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