3 Home Loans for Bad Credit That You Can Easily Apply for in Houston

A bad credit score is one of the many things that homebuyers hate the most. But missed payments, applying for new credits, unknown errors in the card can affect your credit score. And it is difficult for you to get a home loan approval with a low credit score.

But not impossible. Nowadays, there are several lenders who offer home loans for bad credit in Houston. You can opt for any of them. Besides, you can choose any of these home loan programs -

1. FHA home loans

The Federal Housing Administration (FHA), part of the U.S. Department of Housing and Urban Development (HUD), offers a home loan program with lenient credit requirements. Under this program, the FHA won’t actually lend you the money. Instead, it guarantees home loans, meaning the FHA will repay the lender in case a borrower defaults on a mortgage. So, the lenders can be more lenient about credit and income requirements.

And to qualify for an FHA loan, you will need the proof of employment, at least 500 credit score and good down payment, as well as a monthly debt payment below 43%. Specially designed for first-time home buyers and the ones, who haven’t owned a home in the last 3 years, this home loan program could be the better option for you if you have a poor credit score.

2. VA loans

If you are a veteran, military officer, or surviving spouse, and can meet the eligibility requirements, you can qualify for the U.S. Department of Veteran Affairs (VA) home loan program. The VA guarantees loans that are similar to the FHA program in that the VA insures the loan, however, a VA-approved lender issues the home loan.  Besides, there are VA direct loans, where the VA is the lender. But it is available if either you or your spouse is Native American.

Technically, there is no credit score requirement for VA-backed loans. But many VA-approved lenders require a minimum credit score. And it varies from lenders to lenders. But it is not above the conventional home loan programs.

3. USDA loans

USDA is another government-backed home loan program. Designed for low to medium-income group homebuyers, who want to buy a home in the rural areas, the U.S. Department of Agriculture backs the loan in case you default. A loan from the USDA allows you to buy a home in a qualifying rural area with a $ 0 down payment and a low credit score. But different lenders ask for different credit scores. So, you should ask for quotes from them, compare these, and then apply for the loan.

So, low credit does never mean you have to bury your feeling of having your own home. Checked the eligibility of the mentioned loan programs, and then opt for the one that will be the perfect one for you.