If you could the question is, should you? Lots of people with low scores got loans a while back and now many have lost their homes.
A credit score is a reflection of something about your life. We don't know what or why, and I don't mean to judge you, only your present situation.
My strong advice would be to work on your credit and save some money for a while. Getting a handle on your credit, establishing a budget and preparing for emergencies through a savings plan can pay dividends for years and have you ready to buy a house when you have multiple credit options available.
We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.
It is unlikely you could be approved for mortgage financing with that credit score at this time.
Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.
First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.
Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.
I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.
Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.
The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.
The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.
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Quality Mortgage Lending
As for no money down, the USDA /Rural development loan program offers a no money down loan if the home is not in located in Champaign, Urbana or Savoy. You could utilize the program in surrounding area outside of these locations. I would advise you to speak to a lender who offers this program to address any questions or concerns with this program. Contact me if you would like more information.
But call some lenders and find out what you can do to increase your score and get on the buying path. This can give you some time to save some down payment too.