The quick read: Yes, you can get a commercial real estate loan after a bankruptcy or foreclosure, but the answer depends on which lender type reads the file. SBA loans turn on whether the federal government took a loss, not on how long ago your discharge was. Agency multifamily lenders ask about the last 10 years and weigh the story. Banks, CMBS, bridge and private lenders set their own rules.
SBA 7(a) and 504 hard bar: a prior loss to the federal government, unless SBA waives it or the loss is fully satisfied (13 CFR 120.110(q); SOP 50 10 8.1, effective October 1, 2026)
SBA Form 1919 bankruptcy question: asks whether the applicant or any Associate is "presently involved in any bankruptcy" (form effective March 19, 2025)
Freddie Mac multifamily look-back: defaults, foreclosures, workouts and bankruptcies "within the past 10 years" must be disclosed on Form 1115 (form dated August 25, 2026)
Fannie Mae multifamily: no waiting period in the Guide's borrower chapter; the lender reviews Key Principals' "general credit history" (Guide effective September 28, 2026)
Bank, CMBS, bridge and hard-money lenders: lender-specific; no public program period
For contrast only: Fannie Mae's consumer home-loan rules set four years after a Chapter 7 bankruptcy and seven after a foreclosure (Selling Guide B3-5.3-07, dated August 7, 2019). Those periods do not govern commercial loans.
Can you get a commercial real estate loan after a bankruptcy or foreclosure?
You can get a commercial real estate loan after a bankruptcy or foreclosure, because most commercial programs publish no fixed waiting period at all. What they publish instead are disclosure questions and a few hard bars, and the bar that matters most is a loss you caused a federal lending program, which can block SBA financing outright.
That makes the useful question not "how many years?" but "which lender type, and what will it ask me to prove?" The table below sets out what each program actually publishes, dated to the page that states it.
| Lender type | Published look-back or bar | What you disclose | What can compensate | Source (date) |
|---|---|---|---|---|
| SBA 7(a) and 504 | No waiting period after a discharge; a prior loss to the federal government bars the loan unless waived or fully satisfied | On 7(a) loans, Form 1919 asks about a present bankruptcy and any past default on a federal loan; the credit memo discusses bankruptcy filings | Paying off the federal loss; lender judgment on everything else | 13 CFR 120.110(q), eCFR current to October 5, 2026; SOP 50 10 8.1, effective October 1, 2026 |
| Fannie Mae multifamily | No waiting period in the borrower chapter; every principal must clear an ACheck screen | Key Principals' general credit history, experience and financial condition | Financial strength and experience that support the deal's size, complexity, structure and risk | Multifamily Guide Part I, Ch. 3, effective September 28, 2026 |
| Freddie Mac multifamily | A pending bankruptcy or insolvency is unacceptable; past negative credit events may be refused at Freddie Mac's discretion | Defaults, foreclosures, workouts, bankruptcies and enforced guaranties in the past 10 years | Full documentation, including the discharge and proof that undischarged debts were paid | Guide Chapter 9, Bulletin Update August 25, 2026 |
| Bank portfolio loan | Lender-specific | The bank's own application and credit reports | Lower leverage, a stronger co-guarantor, more liquidity | OCC Comptroller's Handbook, CRE Lending, Version 2.0 |
| CMBS conduit | Lender-specific | Sponsor background and credit checks set by the lender | A non-recourse structure with a carve-out guaranty from a clean sponsor | OCC handbook, Version 2.0 |
| Bridge lender or debt fund | Lender-specific | The fund's own sponsor questionnaire | More equity, a shorter business plan, a co-sponsor | No public program rule |
| Hard money or private lender | Lender-specific | Usually a short application and title review | Low leverage against the asset | No public program rule |
The DSCR row is answered separately: see whether a recent foreclosure disqualifies you from a DSCR loan.
What do SBA 7(a) and 504 lenders do with a past bankruptcy or foreclosure?
SBA 7(a) and 504 lenders treat a past bankruptcy as a credit question for the lender, but treat a loss to the federal government as an eligibility bar that no amount of good credit cures. The rule sits in 13 CFR 120.110(q) and is restated in SOP 50 10 8.1, effective October 1, 2026.
Under 120.110(q), a business is ineligible if it, or a business owned or controlled by the applicant or any of its Associates, previously defaulted on a federal loan and caused the government a loss, "unless waived by SBA for good cause." The regulation counts a compromise agreement as a loss. The SOP adds that a loss includes any amount "discharged through bankruptcy."
The same SOP draws two limits worth knowing. A federal loan for this purpose does not include "any loan purchased, held, or securitized by Fannie Mae or Freddie Mac," or federal financing issued to an individual, such as a student loan. And if a prior loss "is fully satisfied, the application can be processed." Lenders must check the Credit Alert Verification Reporting System, known as CAIVRS, and keep the result in the file. The SOP separately bars an applicant, guarantor or Associate with delinquent federal debt until it is fully satisfied, and says a debt discharged in a bankruptcy proceeding is not delinquent.
Read together: a foreclosure on a conventional mortgage sold to Fannie Mae is not a prior loss under this rule, while a defaulted SBA loan you guaranteed almost certainly is.
Form 1919, the SBA 7(a) Borrower Information Form (effective March 19, 2025), asks the two questions that surface this. Question 1 asks whether anyone is "presently involved in any bankruptcy." Question 2 asks whether the applicant or any Associate is currently delinquent on, or "have ever defaulted on," a direct or guaranteed federal loan, "or been a guarantor on such a loan." A yes on either needs details "in a separate attachment." Outside those bars, the lender's credit memo must include a "discussion of any liens, judgments, bankruptcy filings or pending litigation," and for SBA Express the SOP says how much to factor in a past bankruptcy is "left to the business judgment of the Lender."
How do Fannie Mae and Freddie Mac multifamily lenders treat a key principal's credit history?
Fannie Mae and Freddie Mac multifamily lenders look at the people behind the borrowing entity, and both agencies publish screening rules rather than a waiting period. Freddie Mac asks for a dated, 10-year history of credit events; Fannie Mae requires a credit review and an automated screen that must say "You can proceed."
Freddie Mac. Chapter 9 of the Multifamily Seller/Servicer Guide (Bulletin Update August 25, 2026) lists a person who "is insolvent or the subject of a pending bankruptcy or similar proceeding" as unacceptable, and lets Freddie Mac refuse, "in its sole discretion," when a web search shows "negative credit events." Form 1115, the Borrower and Key Borrower Principal Certificate (dated August 25, 2026), asks about credit events "within the past 10 years": any default, foreclosure, or relief by modification, workout or forbearance; any bankruptcy or insolvency proceeding; and any guaranty, "including a recourse carve-out guarantor," that a lender tried to enforce. For each bankruptcy the schedule asks for the chapter, the disposition with a copy of the discharge, "evidence that debts not discharged in the proceeding have been paid," and an explanation of the circumstances.
The same chapter adds a conditional score test on mortgages under $10 million: if a guarantor is an individual, at least one must have an average FICO score of 680 or better across the three bureaus. If fewer than three scores are available, every available score must be at least 680. This rule does not itself require an individual guarantor; Chapter 9 also permits qualifying entity guarantors.
Fannie Mae. Part I, Chapter 3 of the Multifamily Selling and Servicing Guide (effective September 28, 2026) requires a credit review of the borrower's, Key Principals' and guarantors' "general credit history," and requires that their credit history "support the transaction's size, complexity, structure, and risk." Every party must also pass an Applicant Experience Check. If it returns "Do not continue processing," the lender may not proceed by omitting that principal, and Fannie Mae will not explain why. That chapter states no waiting period.
How do banks, CMBS, bridge and hard-money lenders handle a past credit event?
Banks, CMBS conduits, bridge lenders and hard-money lenders publish no program-wide waiting period after a bankruptcy or foreclosure, so each one applies its own credit policy. The practical result is wide variation: one lender declines a file that another prices, and the difference is usually how recent the event is and who guarantees the new loan.
For banks, the OCC's Comptroller's Handbook on Commercial Real Estate Lending (Version 2.0) says a bank's loan policy should set "standards for evaluating borrower and guarantor creditworthiness and global financial condition." That is a requirement to have standards, not a federal schedule, so a bank's answer is its own.
CMBS and other non-recourse lenders rely more on the asset and less on the sponsor's balance sheet, which can make a seasoned event easier to place. The same handbook explains why the sponsor still matters: non-recourse loans carry carve-out guaranties covering "bad acts" such as "fraud or misrepresentation, voluntary bankruptcy," and "certain carve-out provisions" can make the loan full recourse. A lender that sees a prior filing will look hard at whoever signs that guaranty.
Why does a guarantor's personal event read differently from an entity default?
Lenders separate a guarantor's personal bankruptcy from the default of a single-asset entity because the two say different things about the person they are about to rely on. A property-level default on a non-recourse loan can reflect the asset; a personal filing or an enforced guaranty says something about the guarantor's own balance sheet.
The agency forms show the distinction in their wording. Freddie Mac's Form 1115 asks separately about defaults and foreclosures by the principal "or any Related Entity," about bankruptcy, and about guaranties a lender tried to enforce. SBA's rule reaches any business "owned or controlled" by the applicant or an Associate, and its waiver path for a non-controlling minority investor applies only to an owner who held "less than 20 percent of the equity," did not guarantee the defaulted loan, and had no control.
So the facts that help most are specific: you were not the guarantor, the loan was non-recourse, the lender recovered through the property, and no carve-out claim was made. Each of those is documentable. A personal guaranty that was called is a harder conversation, which is why a non-recourse structure with a clean co-guarantor is often the cleaner route back.
What should a letter of explanation for a past bankruptcy or foreclosure cover?
A letter of explanation for a past bankruptcy or foreclosure should give the lender the dated facts it will otherwise find on its own, then show what changed. Freddie Mac's Form 1115 schedule is a good checklist because it names exactly what an agency underwriter wants: dates, chapter, disposition, discharge, and proof that remaining debts were paid.
Keep it to one page and cover five points:
- What happened and when: filing date, chapter, discharge or dismissal date; or the foreclosure sale or deed-in-lieu date and the property address.
- Your role: borrower, guarantor, controlling owner or minority investor, and whether the loan was recourse.
- How it resolved: discharge papers, any deficiency, and evidence that debts not discharged were paid.
- Why it happened: the specific cause, stated plainly, without blaming the lender.
- What is different now: payment history since, liquidity, and how the new deal is structured to avoid a repeat.
Disclose before the lender asks. Every program above finds these events through credit reports, CAIVRS, ACheck or a web search, and a mismatch between the form and the report does more damage than the event. If the event involved litigation or an unresolved claim, have your attorney review the wording; this article is not legal or credit advice.
What can compensate for a past bankruptcy or foreclosure on a commercial loan?
Lower leverage, a stronger co-guarantor and a non-recourse structure are the three levers that most often offset a past credit event, because each one reduces the lender's dependence on the person with the history. None of them overrides SBA's prior-loss bar or Freddie Mac's pending-bankruptcy rule.
Lower leverage. More equity shrinks the loss a lender could take, which is the risk a credit event signals.
A co-guarantor. Adding a partner with a clean history and real liquidity gives the lender a second signature to rely on. On Freddie Mac loans under $10 million, the 680 average FICO test applies conditionally to an individual guarantor; if fewer than three scores are available, each must be at least 680. It does not itself require an individual guarantor.
A non-recourse structure. Where the lender underwrites the asset first, the sponsor's history matters mostly through the carve-out guaranty, so a clean carve-out guarantor can carry the file.
Time and a clean record. No commercial rule cited here fixes a period, but every lender reads a recent event harder than an old one, and payments made since are the best evidence you have.
Have a past credit event and a deal to finance now?
If you have a past bankruptcy or foreclosure and a deal to finance now, the fastest way to learn who will look at it is to put one documented package in front of several lender types at once. Include the explanation letter, the discharge or deed records, and the deal's own numbers.
YieldStack is a commercial mortgage brokerage, not a lender. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed. The brokerage matches a submitted deal against 20,000+ loan programs, and it is one route among several: you can also approach lenders directly. If a flip loan was the one declined, start with what to do after a fix-and-flip loan is declined. Submit your deal with its credit history explained.
The bottom line
A past bankruptcy or foreclosure does not end your access to commercial real estate debt, and no commercial program cited here publishes a fixed waiting period. SBA bars a prior loss to the federal government unless it is waived or fully satisfied. Freddie Mac asks about the last 10 years and rejects a pending bankruptcy. Fannie Mae, banks, CMBS, bridge and private lenders weigh your history case by case. Disclose early, document precisely, and structure the new deal around a clean guarantor.