Buying A Home With Bad/No Credit

Has anyone bought a house with bad credit? How much was your deposit? We are ready for our own space.

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I believe the minimum credit score needed is 580 with FHA and 620 and above for anyone else plus downpayment

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It is somewhat possible to buy a home with bad credit, although I am not sure you can with no credit.

Here is a helpful article on The Penny Hoarder sharing 5 Ways You Can Still Buy A Home With Bad Credit.

I believe the way it works, the lower your credit score, the higher a down payment you may end up having to make but the actual numbers could only really come from a loan officer.

The Penny Hoarder blog also has lots of great information on increasing your credit score that might be worth checking out!

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If you are cash poor with bad credit, it might be possible if you have a family member or fantastic friend who already has investments. I worked out a plan for a family member who had very little credit, and what was there was not the best so we convinced another family member to hold the note on a home they owned but no longer lived in. They were getting ready to put it on the market. We saved them the cost of a real estate commission and a lot of headaches sellers experience when trying to sell a home.

We had a proposal written out that included all seller costs, and implications of capital gains taxes for the seller. We had an attorney draw up the note and put provisions in the note it had to be paid off within 2 years but no sooner than 1 year, meaning the buyer had to refinance in 2 years. That gave them enough time to build up good credit and save some money for a down payment. We actually kept the monthly payment close to their previous rent payment, but added in escrow for homeowner’s insurance and property taxes to be paid to the sellers so they could make sure the home was property insured and that the taxes were paid.

The seller made a little over 3% which is lower than average stock returns of 6%, but way over the return of CDs, bonds and other low risk investments. We also discussed this with the seller’s financial adviser in order to avoid un-planned for cost mines that could blow up for either the seller or the buyer and to keep the seller’s portfolio in balance.

The worst case situation was the seller got the house back in 2 years, along with any appreciation (which could be none or very little) but avoided short term capital gains. The best situation happened in our case and the buyer is now refinancing the home and the seller will be paid off within the 2 years required by the note. The bank has said there should be no problem with the re-fi being approved as good credit has now been established and they have saved for a down payment.


No credit score or 0 credit score is very possible with manual underwriting loan providers. I am not endorsing this group but >>>>> https://www.churchillmortgage…-Manual-Underwriting<<<<< has a lot of info about obtaining a loan with no credit score. It is a longer process that requires more paperwork and time, hence the word “manual” underwriting. Someone has to actually examine your financial health to determine if you are capable of repaying the loan you are requesting. This route is for the people who do not use any type of debt and have 1) never had a credit score or 2) paid off their debts and their score eventually became undetermined or “0” FICO score.


Great info Thanks for sharing! I had no idea there was a such thing as manual underwriting but I can see how that could definitely be helpful.

Especially in the case of someone who has always done a good job of managing their money but have never built up a credit profile.

Sounds like this might not work if you have a bad credit score though?

verify the info in your credit report!..just checked mine and discovered multiple errors…been screwed over creditwise (insurance, jobs, etc) with bad info

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I didn’t need a mortgage to buy my home. I did take out a mortgage in order to buy a car. I have always had bad credit. I contacted Quicken Loans and they were FANTASTIC!! They helped me improve my credit so I could get the mortgage. I highly recommend Quicken Loans to everyone looking to buy a house!!!

it has been my experencie that if you have a good job, have a solid reputation, have some savings and work with the right people you can buy a house with no credit or low credit. You also must be prepared tp wait for a proprerty… Share what you are lookng for on Nextdoor. You will be amazed at how many ways you can get into your first house. W:hat about a contract for deed? Rent to own? Check into your city and county programs for first time homebuyers. if you have skills check out city owned homes that they have offered for rehab sale. It isn’t easy, but i also is not too diffiicult … Alsways remember that e every community wants great homeowners .