Your credit score is not only a three-digit numerical number but something more than that. Why? Well, as your credit score shows your creditworthiness, the mortgage lenders check your credit score before your loan application. So, if your credit score is not good, you may face difficulties in getting approval. Often lenders don’t want to approve loans with a low credit score.
What to do? Well, you can apply for home loans for low credit scores in Houston, TX. While conventional loans need a good credit score, you can get approval for government loans with a lower credit score. And what are the government loans you can apply for? Here are a few loans that you can apply for –
- FHA Loans
Insured by the U.S. Federal Housing Administration, FHA loans are specially designed mortgages for first-time homebuyers or the ones who haven’t bought a home in the last 3 years. Although it is backed by the FHA, it is not offered by them. Rather, it is offered and approved by the FHA-approved lenders. Due to the backing up from the government, you can get approval for this loan with a lower credit score that can be as low as 500. But for that, you need to come with a 580 credit score. And if your credit score is 580 or higher than that, you can get approval with a 3.5% down payment, Check the requirement and apply for the loan.
- VA Loans
Are you a veteran, an active-duty professional, or surviving spouse? Then, you can qualify for a VA loan. It is backed by the Department of Veterans Affairs and offered by the VA lenders. And this loan allows any qualifying service members to buy a home with zero down payments. As with FHA loans, your home should meet specific standards to qualify. And while there is not a specific score you need to qualify for the loan, you will need around a 580 credit score to qualify for a VA loan.
- USDA Loans
Another home loan option for low credit score homebuyers. This loan is backed by the U.S. Department of Agriculture and designed for low to medium-income group buyers who want to buy a home in rural areas. A loan from the USDA allows you to buy a home in a qualifying area with a zero down payment. Most lenders need a 580 credit score to qualify for the loan, along with other income requirements specific to USDA loans. But as the credit score requirements vary from lenders to lenders, you should shop for lenders to grab the best deal.
Check the eligibility criteria for different government-backed loans and apply for the one that will be suitable for you. Your dream home will soon become a reality.