Getting a Mortgage During Chapter 13 Bankruptcy

By Steven Parangi  |  Updated: July 5, 2026

You do not have to wait for your Chapter 13 bankruptcy to be discharged before buying a home or refinancing your mortgage. FHA and VA loans allow qualified borrowers to obtain a mortgage while still inside an active Chapter 13 repayment plan. Alpine Mortgage specializes in these loans which most banks and retail lenders will not originate because they require manual underwriting and coordination with the bankruptcy court.

Can You Buy a House While in Chapter 13?

Yes. FHA and VA loans are the two mortgage programs that allow borrowers to qualify during an active Chapter 13 repayment plan before the bankruptcy is discharged. Both programs have the same core requirements: at least 12 months of on-time payments to your bankruptcy trustee, written permission from the bankruptcy court or trustee to take on the new mortgage debt and a loan file that meets manual underwriting guidelines.

Conventional loans are not available during an active Chapter 13. Fannie Mae and Freddie Mac require a waiting period of 2 years from the discharge date or 4 years from a dismissal date. If your plan is still open conventional financing is not an options until you complete it. Some Non-QM programs will also lend during or immediately after a Chapter 13 typically with larger down payments and higher rates and they can make sense for borrowers who do not fit FHA or VA.

Most banks decline these loans even though the programs allow them. The reason is because a Chapter 13 file cannot receive an automated approval so it requires a human underwriter, extra documentation and coordination with your bankruptcy attorney and trustee. Alpine Mortgage works with wholesale lenders that underwrite these files every day and we close Chapter 13 loans across all 10 states where we are licensed.

Requirements to Qualify During an Active Chapter 13

The 12 month payment history is strict. A single late payment to the trustee inside the plan can disqualify the application so verify your trustee payment record before applying.

How Trustee and Court Approval Works

Because you are still under bankruptcy court protection taking on new debt requires permission. Your bankruptcy attorney files a request with the court that describes the proposed mortgage: the loan amount, interest rate, monthly payment and how the payment fits your budget alongside your plan payment. The trustee reviews whether the new mortgage payment jeopardizes your ability to complete the repayment plan. Approval timelines vary by district and trustee and commonly add 2 to 6 weeks to the transaction. Plan for this when you negotiate your closing date and make sure your purchase contract allows enough time.

Your bankruptcy attorney handles the motion; Alpine does not provide legal advice or bankruptcy representation. What we do is make sure the lending side of the file is structured so the motion has the strongest possible footing, with pre-approval terms and documentation prepared the way trustees expect to see them.

Our Bankruptcy Mortgage Specialist: Steven Parangi

Steven Parangi, the founder of Alpine Mortgage, is a licensed mortgage loan originator (NMLS #76024) and a licensed attorney with more than 20 years of residential lending experience. Steven is familiar with bankruptcy lending and with his dual background he understands both the lending guidelines and the court process that Chapter 13 files have to satisfy. Steven works directly with Chapter 13 borrowers on:

• FHA and VA purchases during an active Chapter 13 repayment plan
• Chapter 13 buyout refinances that pay off the plan and end the bankruptcy early
• Structuring pre-approval terms for the motion to incur debt
• Coordinating directly with your bankruptcy attorney and trustee requests
• Post-discharge loans inside the 2 year manual underwriting window most banks decline

Read Steven's full bio, media mentions, and client reviews →

Manual Underwriting Guidelines for Chapter 13 Borrowers

Every mortgage closed during an active Chapter 13 is manually underwritten. A human underwriter reviews the complete file instead of relying on an automated approval. Expect these standards:

• Verification of rent. Underwriters typically want 12 months of documented on-time housing payments shown through canceled checks, bank statements or a verification form from a property management company.
• Tighter debt-to-income limits. Manual FHA underwrites generally cap ratios around 40% front end and 50% back end and reaching the upper end requires documented compensating factors such as cash reserves, minimal payment shock or residual income.
• Clean credit since filing. Late payments on any account after the bankruptcy filing date are a serious problem often more damaging than the bankruptcy itself.
• Letter of explanation. A short written statement covering what caused the bankruptcy, what has changed in your finances and why it will not recur.

Compensating factors decide marginal files. Reserves after closing, a new housing payment close to your current rent, stable employment history and income not counted in qualifying all strengthen the file. We identify your compensating factors before submission rather than hoping the underwriter finds them.

Refinancing During Chapter 13

Homeowners inside a Chapter 13 plan have two refinance options.

Rate and term refinance. An FHA refinance can lower your rate or payment while the plan continues. The same rules apply: 12 months of on-time trustee payments, court approval and manual underwriting. A lower mortgage payment can also free up room in your monthly budget for the plan itself.

Chapter 13 buyout refinance. If you have enough home equity, a cash out refinance can pay off your remaining Chapter 13 plan balance in full and end the bankruptcy early. The court must approve the transaction and trustees often view it favorably because creditors get paid faster. Borrowers use this to exit bankruptcy years ahead of schedule, stop the monthly trustee payment and start the post discharge clock sooner. Equity, current rates and your remaining plan balance determine whether the math works and we run that analysis with you before anything is filed.

A Chapter 13 Example

Here is how a typical purchase during an active Chapter 13 comes together:

Figures are illustrative. Rates, payments, and approval outcomes depend on your credit profile, income, property, and the court's decision.

During the Plan vs. After Discharge vs. After Dismissal

Where you are in the Chapter 13 process changes which programs are open to you:

Discharge means you completed the plan and the court released you from the included debts. Dismissal means the case closed without completion, and lenders treat it less favorably. If you are unsure of your status we can help you read your bankruptcy paperwork and confirm the dates that control your eligibility. For full waiting period details across all programs and bankruptcy types, see our bankruptcy home loans guide.

How the Process Works at Alpine

Why Chapter 13 Borrowers Choose Alpine Mortgage

Alpine Mortgage is a wholesale mortgage broker that specializes in FHA and VA loans during active Chapter 13 repayment plans, a loan type most banks and retail lenders decline. Alpine is licensed in 10 states (CA, CO, CT, FL, GA, NJ, NY, OH, PA, TX), has closed more than 8,000 loans since 2002 and holds a 4.9 Google rating. Here is why Chapter 13 borrowers choose Alpine Mortgage:

Ready to Get Started?

Whether you're in an active Chapter 13 or recently been discharged Alpine Mortgage is ready to help. Alpine Mortgage provides bankruptcy mortgages in California, Connecticut, Colorado, Florida, Georgia, New Jersey, New York, Ohio, Pennsylvania and Texas.

Or call (201) 488-8809 to speak with a bankruptcy loan specialist today.

Chapter 13 Mortgage FAQs

Chapter 13 Mortgage Resources

• Bankruptcy Mortgage Guide
• HUD Single Family Housing Policy Handbook 4000.1
• VA Lenders Handbook
• Bad Credit Loans
• Hard Money Loans