Buying a house with bad credit can seem like trying to climb a mountain in flip-flops—but it is doable, as long as you have a sense of which lenders have your back. Most banks will deny borrowers with FICO scores of less than 620, but some institutions make it their mission to help those who’ve had some bumps along the financial road.
Whether you’ve dealt with bankruptcy, missed payments, or just a low score, here are five mortgage lenders that work with bad credit borrowers—and what makes each one stand out.
1. Carrington Mortgage Services
***Minimum Credit Score: 500
***Loan Types: FHA, VA, USDA, Conventional, and proprietary non-QM products
Carrington is the kind of MVP for poor-credit mortgages. They deal specifically with purchasers whose credit will be as low as 500, which is surprisingly uncommon among mortgage companies.
One of their safest wagers is the Flexible Advantage product, a non-QM (non-qualified mortgage) mortgage aimed squarely at borrowers who’ve had some recent credit problems—foreclosure, short sale, bankruptcy, or late payments ring a bell. These kinds of applicants are more or less automatically rejected by conventional lenders, but not by Carrington.
They look at the full picture—your income, your job history, and your current ability to repay. If your FICO score has been dragging because of old wounds, but you’re financially stable now, they might be your best shot.
I may earn a referral commission from some of these lending entities. It will not make any difference to your pocket.
2. New American Funding
***Minimum Credit Score: 580 (for FHA loans)
***Loan Types: Conventional, FHA, VA, Non-QM, and more
New American Funding specializes in helping borrowers who don’t fit within the traditional lending box. They go down to 580 for FHA and lower in some cases with manual underwriting, meaning that your application is reviewed by a person instead of being rejected by a computer.
Another plus: they’re accommodating to non-traditional earners—gig workers, freelancers, or those who have side hustles. If your W-2s aren’t showing the whole picture, they’ll work with bank statements, 1099s, and other documentation of regular income.
They also place a big emphasis on first-time homebuyer education, which is a plus if this is your first time through the mortgage process.
3. Guild Mortgage
***Minimum Credit Score: Approximately 540–580 (varies by loan type)
***Types of Loans: FHA, VA, USDA, Conventional, and state/local down payment assistance programs
Guild Mortgage is decades old and one of the more lenient lenders when it comes to credit requirements. Their FHA loans go as low as 580, and in some cases, they’ll even take borrowers in the 540 range—especially if you’re bringing more money down or qualify for special programs.
What distinguishes Guild is its extensive network of down payment support and regional grant collaborations. If saving for a down payment is equally as hard as your credit is, Guild can assist in putting the pieces together and bring the initial out-of-pocket costs to a more affordable level.
And, having been manually underwritten, they’re less likely to take an adverse action against you if you have stability and a stable income, even if your credit score is not that great.
4. Caliber Home Loans (Now a subsidiary of Newrez)
***Minimum Credit Score: 580
***Loan Types: FHA, VA, Conventional, Jumbo, and Non-QM
Caliber (owned by Newrez) is another mortgage lender that is familiar with the nuances of “credit-challenged” borrowers. While their FHA loans target scores of 580 and higher, where they perform best is with their non-QM loans—the kind you’re less likely to obtain from most banks.
Assume you’re self-employed, came out of a Chapter 13 bankruptcy, or have a lot of assets but minimal income on paper. Caliber possesses loan options that look beyond credit scores and tax returns. Their bank statement loans and asset depletion options can get you in the door when a traditional lender would close it out.
And because they’re a larger lender with national coverage, you get the technology benefits (e.g., fast digital app) without having to give up access to real human support when needed.
5. Angel Oak Home Loans
***Minimum Credit Score: 500 (program-dependent)
***Loan Types: Non-QM products like bank statement, investor cash flow, and asset-based loans
Angel Oak is all about non-QM lending, which is perfect for individuals whose credit or income status simply does not fit. They have solutions for borrowers who’ve had recent bankruptcies, late payments, or foreclosures, at times as recent as 12 months ago.
Their top-selling products are:
***Bank Statement Loans – No tax returns needed
***Asset Qualifier Loans – For retirees or high-net-worth individuals with low monthly income
***Investor Cash Flow Loans -Based on Rental Income Potential
If you’re outside the traditional lending world and your credit history is less than pristine, Angel Oak might be one of your strongest options. Just be aware: non-QM loans often come with higher interest rates and larger down payment requirements.
Final Thoughts
Poor credit is not a mortgage kiss of death—it simply means you need to be more strategic when choosing a lender. These five operate outside the box to get you approved for a loan, even if your FICO score isn’t as robust as you’d like it to be.
But the trick is this: Don’t make a decision based solely on interest rates. Note fees, terms of the loan, and underwriting flexibility. And if one says no? Don’t fret. Others on this list will still say yes.
Before applying, check your credit report for errors, pay down any small debts, and consider working with a housing counselor. A little prep can go a long way in strengthening your application, even if your score is still under 600.
Ps: Please check out other posts on refinancing loans.
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