FHA Loans for Those With Low Scores
A low credit score doesn’t mean you can’t get an FHA loan, no matter what you were told. The FHA can help those with low credit scores down to a 500 score. With a score of 500 to 579, you only need 10% of the purchase price down on an FHA loan! Those with a 580 or higher can qualify for an FHA loan with as little as 3.5% down. FHA even allows family to help gift funds for your loan!
Credit issue FHA timelines can be found here.
The Big-Lender Problem
The larger a lender, the less likely they will be to help someone with a smaller loan or credit issues. This unfairly excludes those who want to buy a house, but have fallen on hard times. They will place extra restrictions on the loans they are “allowed” to take so that they only deal with high-credit, easy to process loans from over-qualified borrowers, even though the FHA allows borrowers all the way down to a 500 score!