Buying a Home in Texas After Bankruptcy: How Long Must I Wait?

 Posted on September 05, 2025 in Bankruptcy

Filing for bankruptcy in the state of Texas does not have to mean the end of your dreams of owning a home. While most people assume that filing for Chapter 7 or Chapter 13 personal bankruptcy means they will never qualify for a mortgage, this is not necessarily the case. Although bankruptcy will undoubtedly affect your credit, there is a path to buying a home following bankruptcy.

When you have a clear understanding of the loan requirements and waiting periods, and the steps you need to take to rebuild your financial profile, home ownership can become a reality. An experienced Arlington, TX consumer bankruptcy lawyer can help you get back on track financially while working toward purchasing a home.

Bankruptcy’s Impact on Credit Scores and Mortgage Eligibility

A bankruptcy will definitely impact your credit score, with the effect lasting from seven (Chapter 13) to 10 years (Chapter 7). Depending on your credit health before filing for bankruptcy, you can likely expect a credit score drop of at least 100 points. Although the record of bankruptcy remains for years, the negative impact lessens significantly over time. A positive credit history can begin to be rebuilt within one to two years with responsible financial behavior. Furthermore, lenders consider an individual’s overall credit history, rather than just his or her bankruptcy status.

What Are the Waiting Periods After Bankruptcy for Mortgage Eligibility?

There are specific waiting periods required for those who want to apply for a mortgage loan, including:

• FHA loans can typically be applied for two years after a Chapter 7 discharge and one year into a Chapter 13 plan, with court approval.
• Four years after Chapter 7 discharge and two years after Chapter 13 discharge, conventional mortgage loans like Fannie Mae and Freddie Mac can be applied for.
• VA loans can typically be applied for two years following the Chapter 7 discharge of bankruptcy and one year from the start of the Chapter 13 repayment plan.  
• USDA loans can be applied for three years after discharge of a Chapter 7 bankruptcy or one year after the start of the repayment plan for a Chapter 13 bankruptcy, with court approval.
• The waiting period for a conventional loan is usually four years for Chapter 7, or two years from the discharge date of Chapter 13 bankruptcy.

Rebuilding Your Credit Following a Chapter 7 or Chapter 13 Bankruptcy

Following a Chapter 7 or Chapter 13 bankruptcy, the best way to achieve homeownership as quickly as possible is by making all payments on time, using secured credit cards and small personal loans, paying them back in full each month, and keeping credit balances low. Always monitor credit reports for errors, and consider Texas-specific down payment assistance programs, such as My First Texas Home, for first-time buyers. A larger down payment can often offset bankruptcy issues with mortgage lenders.

Common Mistakes Made When Applying for a Mortgage Following Bankruptcy

Many people make these common mistakes when applying for a mortgage post-bankruptcy:

• Applying too soon
• Failing to keep accurate financial records to show lenders
• Taking on high-interest debt immediately after discharge.
• Failing to show responsible credit use after bankruptcy

Special Considerations for Self-Employed Texas Home Buyers After Bankruptcy

Self-employment can add to the complexities of obtaining a mortgage following bankruptcy. Unlike traditional employees who provide W-2s and pay stubs, lenders may require a minimum of two years of business and personal tax returns for self-employed individuals that prove stable income. While many self-employed individuals maximize business deductions to lower their taxable income, since lenders calculate qualifying income based on net earnings, this can reduce the amount a borrower is approved for.

Contact a Wise County, TX Chapter 13 Bankruptcy Lawyer

Bankruptcy does not necessarily close the door to future homeownership, although it may delay the process a bit. With the right preparation and guidance from an experienced Arlington, TX Chapter 7 bankruptcy attorney from Acker Warren P.C., you can qualify for a mortgage sooner than you might expect. When you choose our firm, you will always speak to an attorney rather than a paralegal. We can almost always complete your case quickly, in some cases, virtually. To schedule your free consultation, call 817-752-9033.