Mailbag: Loans for People with a Previous Bankruptcy, Short Sale, or Foreclosure

Scenario / Question:

“Hello ARC Capital”,

I am trying to find ways to help some of my clients…

Some of my clients are probably ready to buy at this time. Others have had a foreclosure, short sale and /or bankruptcy in the past 1,2,3 years.

I do not know if there is a possibility for them. Could you please help me and my clients get some information and possibilities and/or hope?

Thank you for your attention.”

(Submitted by a real estate agent)


The short answer is that we can offer loans right now for any of the situations you described – as long as – the down payment is 35% or more.

This option would be available through a private money lender. (Hard money loans)

We also don’t have any minimum credit score or credit history requirements. This allows your clients to purchase a property soon after a short sale, foreclosure, or bankruptcy.

The longer answer…

If a 35% down payment is not possible for your clients at this time, their next option would be to work on reestablishing their credit history. Then they would need to wait until they can meet the guidelines to be eligible for a new mortgage loan through a bank or credit union.

As long as your buyers meet the requirements for an FHA loan at that time, they should be able to qualify for a new mortgage with a lower down payment.

Every lender may have their own guidelines, but you can generally expect a waiting period of 2 years for a bankruptcy and 3 years from a short sale and/or foreclosure.

The mortgage lender would likely require that the buyer (borrower) have a reestablished credit history and also meet the minimum credit score requirements at the time of application.

Thanks for the inquiry! 🙂

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  17. Maricor M. Bunal


    Great answer. The possibility of getting loans after bankruptcy, short sale or foreclosure is challenging and odd. But, with the right ears, one can be guided on some smart ways. Loan solutions is open for inquiries and financial management. Visit us at!

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