Common challenges
A score gap of 20–40 points can change both approval and price. Small fixes before applying matter.
Programs that fit
FHA Loans
An FHA loan is a government-insured mortgage that allows 3.5% down with a credit score of 580 or higher, or 10% down with a score from 500 to 579.
Non-QM Loans
A non-QM (non-qualified mortgage) loan is any mortgage that documents income or credit outside the standard Qualified Mortgage rules, using bank statements, a P&L, 1099s, assets or rent instead of W-2s and tax returns.
VA Loans
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs that lets eligible veterans, active-duty service members and certain surviving spouses buy with no down payment and no monthly mortgage insurance.
Hard Money Loans
A hard money loan is a short-term investment-property loan from a private lender that approves mainly on the property’s value and the deal, not your income or credit history.
Tips before you apply
- Pay revolving balances below 30% (ideally 10%) before the credit pull.
- Do not open new accounts during the process.
- Ask about a rapid rescore once corrections post.
FAQ
What is the best mortgage for borrowers with lower credit?
It depends on your documentation and goal. The programs that most often fit are FHA Loans, Non-QM Loans, VA Loans, Hard Money Loans.