1,401,176 HECM reverse mortgages insured by FHA since 1989.
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Reverse mortgage question
It depends on whether your HECM is on the home you already live in or a HECM for Purchase. For a HECM on your current home, HUD doesn't set a waiting period once a Chapter 7 is discharged. For a HECM for Purchase, at least two years must have passed since the discharge when the FHA case number is assigned, or at least 12 months if the bankruptcy was caused by circumstances beyond your control and you've handled your finances well since. Either way, the lender reviews your credit and payment history, and that review decides whether part of your loan is set aside to pay property taxes and insurance.
If you're getting a HECM on the home you already live in, including a refinance of your current mortgage, HUD doesn't set a waiting period after a Chapter 7 is discharged. HUD also doesn't set a minimum credit score for a HECM.
That doesn't mean the bankruptcy is ignored. The lender still looks at your credit history as part of the financial assessment, which I explain below.
If your bankruptcy is still open, talk with us before you apply. You'd generally need approval from the bankruptcy trustee or court to move forward.
If you're using a HECM for Purchase to buy your next home, the timing is stricter. At least two years must have passed since the bankruptcy discharge date by the time the FHA case number is assigned.
If it's been less than two years but at least 12 months, a HECM for Purchase may still be possible. You'd need to show all of these:
HUD measures from the discharge date, so have that date handy. If your credit report doesn't show it, the lender will ask for your bankruptcy and discharge papers.
Whether it's a refinance or a purchase, the lender reviews your credit and how you've paid your property taxes, homeowners insurance, and other bills. That review is called the financial assessment. The lender also checks your residual income, which is what's left each month after your regular bills.
A bankruptcy doesn't automatically mean a Life Expectancy Set-Aside (LESA). HUD treats it as a serious credit event, but the lender looks at the whole picture: your payment history over the last couple of years, your property tax and insurance history, your residual income, and whether there were extenuating circumstances. If your credit or property charge history doesn't meet HUD's standards and there's no documented explanation, the lender has to require a LESA. A residual income shortfall can also lead to one.
A LESA is money held back from your loan to pay your property taxes and homeowners insurance for you. It lowers the amount you can use for other things, but it takes those two bills off your plate. It doesn't cover everything. You're still responsible for things like HOA dues and upkeep, and if your taxes or insurance go up enough that the set-aside runs short, you'd need to cover the difference.
This is where a good explanation matters. If the bankruptcy came from something outside your control, like a serious illness, a job loss, or the death of a spouse, and you can document it, the lender can take that into account. We work hard with borrowers to explain derogatory items and extenuating circumstances, and most of our clients pass the financial assessment.
Please don't send documents through the website. Your loan officer will tell you what's needed and the safe way to share it.
Every situation is different. Your loan officer can go over your dates with you and tell you where you stand before you apply.
ZYNG Mortgage, Inc., NMLS #76801. A reverse mortgage has no required monthly mortgage payments and uses your home's equity. Fees, mortgage insurance and other costs can be added to the loan balance, and the balance grows over time as interest is added, so your equity typically decreases. When the loan becomes due, the home may need to be sold, or the loan repaid from other funds. Interest is not tax-deductible until it is paid, in part or in full. You keep title to your home and must keep paying property taxes, homeowners insurance and upkeep, and meet the other loan terms; not doing so can make the loan due and could lead to foreclosure.
This material is not from HUD or FHA and was not approved by HUD or a government agency.
HECM count at the top of this page: HUD data through September 2026 (source, opens in a new tab).
