With mortgage rates so low right now, New Jersey residents who struggled through the recent recession and took hits to their credit ratings are in recovery mode and ready to purchase homes.

But what about the couples and individuals who filed for bankruptcy — can they qualify to buy a home? Chances are good that they might. New programs that were implemented by the current administration and revamped guidelines allow more people with Chapter 13 or 7 bankruptcies on their credit history to tackle home ownership.

One program, the Federal Housing Administration’s Back To Work, permits buyers to qualify only a year after their bankruptcies have been discharged.

Three factors influence the length of time bankruptcies will affect your home purchasing power — kind of bankruptcy (Chapter 7 or 13) that was filed, type of mortgage program and the mortgage lender’s requirements.

Some lenders take into account when extenuating circumstances such as a breadwinner dying, permanent lay-offs or mountains of medical bills force a debtor into bankruptcy. People who filed for reasons other than simple fiscal mismanagement may have a shorter length of time to wait.

Those seeking conventional loans with Fannie Mae and Freddie Mac might have to wait for four years after having their debts discharged under Chapter 7, even longer if they have filed more than once in the past seven years.

FHA loans are usually a lot more lenient when it comes to bankruptcy and waiting periods. Homes can be financed after only two years’ post-discharge of debts, and it doesn’t matter whether you remained debt-free or re-established your good credit rating.

Because this can be quite confusing to those in the midst of the bankruptcy process, it’s a good idea to clarify any questions about your future credit-worthiness with your bankruptcy attorney.

Source: The Mortgage Reports, “With Rates In The 3s, Post-Bankruptcy Applicants Are Asking When They Can Buy Again,” Gina Pogol, accessed Sep. 02, 2016