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Best Home Loans With Bad Credit
22 Jul 2019

2019’s Best Home Loans With Bad Credit

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As of 2018, 12% of people living in the U.S. have a FICO credit score of 550. 620 or lower is considered a poor credit score. It can be hard to keep up a good credit score, sometimes you just fall under hard times.

This doesn’t mean it is the end for you! If you are looking to get a home loan there are still many viable options. A bad credit score doesn’t mean you can’t get a home loan.

Below we are going to look at the best home loans for bad credit.

Best Home Loans for Bad Credit

There are many loans out there. We are going to sift through some of the top loans so you can find the loan that best suits your needs.

USDA Loans

The USDA (U.S. Department of Agriculture) offers housing loans to you as long as you live outside major cities. You can view their map to see where you are eligible to apply.

USDA loans offer you the ability to get the loan without requiring a down payment. If you are short on cash, this could be a great option.

On top of that, there is no credit score requirement for USDA loans. Yet, for most lenders, you will need to have a credit score of 640. This does not mean you can’t get a USDA loan.

If you can get an underwriter to process your application, you can be approved with a lower credit score. Yet, you will need to prove that you aren’t going to be a high-risk client.

You will be asked to show compensating factors. For example, show them that you have a good track record of paying your rent or showing that you have low debt.

FHA Loans

FHA loans are the easiest loans to get if you have bad credit. You can get a loan with a credit score as low as 500, but you will have to provide a 10% down payment. If you have a credit score at 580 or above you will pay a 3.5% down payment.

You will have to get an underwriter and give compensating factors, just as you would with a USDA loan.

VA Loans

VA loans are a great option if you are a veteran. Like USDA loans, you do not need to provide a down payment. VA loans also offer lower interest rates and no mortgage insurance.

Lenders will typically offer you a loan if you have a credit score of 620 or higher. Yet, you can find lenders that will offer you a loan if you have a credit score as low as 580.


LendingTree offers a lot of flexibility. You can compare lenders and find the best loan that meets your needs online.

You can fill out your application before you even meet a lender. Once you have filled it out, LendingTree will pool together loans suited to your credit score.

You don’t need to leave the comfort of your home to be approved for your new home loan.

Rocket Mortgage

Rocket Mortgage by Quicken Loans allows you to get approved online as well.

They don’t just look at your credit score, but at other compensating factors. For example, they consider how consistent your income is, and what is in your savings account.

They even make the process easy for you. You can share all your information online vs having to provide W-2s or pay stubs.

Wells Fargo Home Mortgage

Wells Fargo also offers an online application process. The lowest credit score you can have is 620.

If you have low credit they will review your financial history to decide if you can be approved for a loan. So, if you have a credit score below 620 you can still get approval.

Bank of America Mortgage

With Bank of America, you will be put in contact with an underwriter. They will look at your credit score and your financial history. They will also examine the value of the home you will be purchasing.

Their main concern is that you will be able to pay back the loan if you are approved. They will look for a loan that best fits your financial needs.


CitiMortgage looks at how consistent you are at paying back your rent or childcare.

Like with most of these mortgage loans, they offer a 3% down payment (depending on how poor your credit score is).

If you are applying for a loan be aware that your house needs to be in good condition to be considered. There can’t be any construction or repairs happening on the property when you apply for the loan.

The Bottom Line

Now that we have reviewed the best home loans for bad credit, it is time for you to go out and pick one. Look at what they offer and see if they can meet your personal needs.

If you are worried that your credit score is too low, look into ways that you can improve it. Do this before you apply for a home loan.

Review our blog if you want to learn more about bad credit loans.

Here are some other articles that you might enjoy:
What Is A Guaranteed Credit Card Offer?
Best Personal Loans for Bad Credit: 4 Tips for Reviewing Lenders
Top 5 Features Of The Best Loans
How to Get Business Loans for Bad Credit without Breaking the Bank