Home Buying in 95843>Question Details

Patty_rice, Home Buyer in 95843

Potential first time home buyer with low credit scores and a past eviction. Will I qualify to buy a condo 100k or less?

Asked by Patty_rice, 95843 Mon May 21, 2012

I would like to buy a condo in the Sacramento area by the end of the year. I make approx $2000/month. No credit cards, car payments, or any other debts.

Help the community by answering this question:


Qualitications for obtainng a home loan are different than being a good tenant. First, you need a credit score, in most cases, of 640, although some lenders will advertise they can get you a loan with a credit score as low as 580. It makes sense to see why your score is so low and take the proper steps to increase your score. It may mean: paying off old debt, obtaining additional lines of credit (having 3 lines reflected in your score can boost your score), The second qualification is your debt to income ratio. Having an income of $2,000 should be able to qualify you for a home at $100,000 when you have no other debt that has to be paid on a monthly basis as well.
Third, do you have any collateral, or down payment funds that may be required to purchase a home? The down payment can be a gift from someone else but there is a minimum amount that you would need to provide in order to purchase a home.

It's best to talk to a lender. In your case, I would recommend Tyler Horton at Chase Mortgage. His fees are lower than a traditional broker in that he does not charge origination fees. He can be reached at tyler.d.horton@chase.com. They have all kinds of new incentives to save you money as well. Tell him I sent you.

Once he assesses your credit situation, it may be necessary to set up a plan to get your credit score improved. In any case, I'd recommend you attend a local day long seminar about homewnership. One such program is the Neighborworks program although there are others. They will review all aspects of finding a home, negotiating and then obtaining a home and things you need to be aware of. it's an excellent course on home ownership. Good luck!
1 vote Thank Flag Link Mon May 21, 2012
it's a good goal to have Patty, and I'm sure you'll get there sooner than you think once you set a plan in place. Good luck to you!
Flag Mon May 21, 2012
Thank you for all the helpful advice... I'm looking to buy toward the end of the year or more than likely next year (due to my credit). I have heard about that program and am definitely going to check it out. Thank you for the referral to Mr. Horton. I may contact him soon and see what he advises (and I will not forget to mention you :)). I believe I will have to establish a bit more credit before buying a home and I also need to finish paying off the eviction. Again thank you for all the advice.
Flag Mon May 21, 2012
FHA Insured by the Federal Housing Administration. Down payments as little as 3.5 percent. Can use DAP for 3.5 percent down payment requirement. Upfront and monthly mortgage insurance. Minimum credit score of 640.

VA Guaranteed by the Veterans Administration for qualified military veterans. No down payment if the property appraises for the sale price or greater. Credit underwriting is flexible. Minimum credit score of 620. No monthly mortgage insurance payments.

RHS Guaranteed by Rural Housing Services (RHS). Home must be located in a rural area as defined by RHS. No down payment if the property appraises for the sale price or greater. Minimum credit score of 640. No monthly mortgage insurance payments.

Mortgage Credit Certificates (MCC) A Mortgage Credit Certificates (MCC) reduces the amount of federal income tax you pay, giving you more available income to qualify for a mortgage loan. MCCs are NOT mortgages. They are tax credits that put extra cash in your pocket each month, so you can more easily afford a house payment. That means fewer tax dollars will be withheld from your regular paycheck, increasing your take-home pay. The federal government allows every homeowner an
1 vote Thank Flag Link Thu Jan 23, 2014
KHC is used for mostly applicants in urban areas of Kentucky that don't have access to USDA or other government agencies to buy a home with no down payment.
Down Payment Assistance for Ky First Time Home Buyer, 100% Financing

You cannot have an owed a home in the last 3 years to use KHC down payment assistance to buy a home with zero down.

In the State of Kentucky, there are mortgage loans available for First Time Home Buyers to purchase a home with no down payment. KHC or KY Housing classifies a first time home buyer as someone that has not owned a home in the last 3 years.

There are two different types of Down Payment Assistance thru KHC that are outlined below:

Regular DAP
Purchase price up to $243,000.
Assistance in the form of a loan up to $6,000 in $100 increments.
Repayable over a ten-year term at 5.50 percent. A DAP of $6,000 over ten years at 5.50 percent interest would equal a payment of $65.12.
Available to all KHC first-mortgage loan recipients.
Purchase price up to $243,000.
Assistance up to $4,500
Repayable over a ten-year term at 1.00 percent.
Borrowers must meet Affordable DAP Household Income Limits.
More about down payment and closing costs
No liquid asset review and no limit on borrower reserves.
Specific credit underwriting standards may apply to down payment programs.

To successfully originate KHC mortgages you should begin with qualified credit score of 640
Max Housing ratio caps of 40%/45%
Kentucky Housing Program guidelines:
First-time home buyers, unless property is located in a targeted county.
Interest rate is fixed at 2.5 percent without Down payment Assistance Program (DAP) or 3.0 percent with DAP.
Maximum ratios 40/45 percent.
Executed purchase contract.
Existing or new construction property (purchase price limit $234,000).
Regular and Affordable DAP available.
FHA, VA, and RHS first-mortgage programs.
640 credit score and AUS approval.
Gross annual household income limit of for all household sizes.
502 905 3708
NMLS #57916
1 vote Thank Flag Link Tue Dec 17, 2013
Pay your bills on time. Late payments can hurt your score significantly. If you have missed payments, get current and stay current. The more you pay your bills on time, the better your score.
Keep credit card balances low relative to credit limits (30 percent or lower is recommended). "Maxing out" your credit cards means you have a very high utilization rate, which significantly lowers your credit score.
Pay off debt rather than moving it around.
Open new credit accounts only as needed; new accounts decrease the average age of your total accounts. Having accounts that have been opened a long time increases your credit score.
Avoid closing credit card accounts because this also decreases the average age of your accounts.
Apply for installment loans (mortgages, car loans, etc.) within a 30-day period because most credit scoring models will count multiple inquiries within a short period of time as only one inquiry

Joel Lobb (NMLS#57916)
Senior Loan Officer
502-905-3708 cell
502-813-2795 fax

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
1 vote Thank Flag Link Fri Apr 26, 2013
Hi Patty,

Do you have a satisfactory rental history for the last 12 months?

Do you owe your previous landlord? If so, you definitely want to handle that before you start the home buying process.

I suggest you meet with a local mortgage professional to review your situation.

Best regards,

Elva A. Wormley
C2 Financial Corporation
2845 Moorpark Avenue, Suite 209
San Jose, CA 95128
1 vote Thank Flag Link Mon May 21, 2012
Hi Patty

Hi cases such as yours the answer is 'it's a matter of time'. How long ago was the eviction? And, when you say 'low credit scores' what do you mean and why are they low? I am a little concerned that you have no credit cards, car payments and so on. What credit scoring agencies are looking for is 3 open lines of credit. I know it sounds crazy to improve your credit score by going into debt, but that's how it is.

I would recommend you talk to a good local mortgage banker and see what they say. There are other considerations, such as income and debt to income ratio (which you obviously do not have a problem with) that are taken into consideration. The banker will be able to tell you what, if anything, you qualify for today and, if not today, what you need to do to improve your situation and even approximately how long that will take. Follow their advice and, before you know it, you WILL qualify for a mortgage.

When I say, 'local mortgage banker' I do not mean one of the big banks but a small company that specializes in writing mortgages. I work with Annie Mac Mortgage here in New Jersey. If you don't know such an organization, call a local realtor and ask to be referred. Then, when the time comes, show your appreciation by letting that realtor help you find a home.

Good Luck, I am sure you will be in a position to buy in no time. Suzanne
1 vote Thank Flag Link Mon May 21, 2012
Credit: Most lenders want a 640 credit score, however there are some lenders now doing FHA loans down to a 620 score with no bankruptcies in the last 2 years and no foreclosures in the last 3 years.

If you have a 620-639 credit score there is a possibility of doing a FHA loan with a 3.5% down payment.

Down Payment: There are still housing programs that exist for Kentucky home buyers whereas you can purchase a home with no down payment. You will need a 640 mid credit score to purchase a home using the USDA or KHC loan programs for their no down payment credit requirements.

If you have access to at least 3.5% down payment or more, we can always look at doing a Fannie Mae or FHA loan and possibly securing a little better rate on the terms of your loan. I will go over your options once we get you pre-approved to let you decide which is best for your situation.

Income: The maximum house payment is usually limited to 1/3 of your gross monthly income. For example, if you make $3000 gross a month, then x that by 30%, and this would equal about a $900 maximum house payment.
0 votes Thank Flag Link Wed Oct 28, 2015
It depends on how many years back you had the eviction. Also regarding the low credit score; you can talk to a loan specialist that will have so many different options for you that fits your needs.
Call me and I will get you a good loan officer that can help. 916-595-7428
0 votes Thank Flag Link Thu Aug 21, 2014
It depends on how many years back you had the eviction. Also regarding the low credit score; you can talk to a loan specialist that will have so many different options for you that fits your needs.
Call me and I will get you a good loan officer that can help. 916-595-7428
0 votes Thank Flag Link Thu Aug 21, 2014
Hi Patty, Just checking... I know this question is from a ways back, but were you able to buy a house? If I can be of assistance, feel free to contact me at your convenience. You can live chat with me at the link below and my full contact information tagline will also be posted as a reply to this comment. Regards, Robert Hanson: robertlh66@verizon.net
0 votes Thank Flag Link Mon Feb 10, 2014
I can do a full underwriting approval ahead of time if need be and I also offer credit score improvement programs for free while we work on your mortgage.

If you like my answer above, consider clicking on a “Thumbs Up” or “Best Answer”


Robert L. Hanson
Gladewater National Bank
First Time Homebuyer Specialist

Direct: 240-752-7549 Cell: 301-651-7822
Email: robertlh66@verizon.net
NMLS# 695929
Flag Mon Feb 10, 2014
I live by the rule of 333

I need 3 minor credit cards ie. (Sell gas card, Target, Walmart )
I need 3 major Credit Cards ie ( MasterCard, Visa )
And only 30 % balances.

1000.00 available credit you us 300.00 30 %

Watch your credit score go crazy

For this information or more feel free to contact me.
0 votes Thank Flag Link Tue May 28, 2013
Hi Patty, Halfway between Antelope and Carmichael: Owner finance is possible on this renovated two bedroom condo in tranquil, leafy, creekside Oak Grove HOA., Foothill Farms 95841 (near Carmichael.) Condo is being thoroughly renovated from top to bottom with new ceilings, new flooring, fresh paint, new light fixtures, new bathtub, new six panel interior doors, new kitchen cabinets, kitchen sink, countertops, dishwasher, disposal, range fan hood, new patio fence, Suggestion: $20,000 down, We'll carry $50,000 for five years at 8.875% interest, payments of only $397 per month principal and interest. (amortized over 30 ) or at 7.75% amortized over 10 years at $600 per month. Larger down also qualifies for a lower rate and lower payment.

HOA dues are $245 per month. Water, sewer, garbage $38 per month (billed every other month)

Madison from I-80 to Manzanita, go left/north on Manzanita, turn left on Shadow Creek, property is on corner of Winfield & Shadow Creek. Pool is located at end of Peppermill Ct.
0 votes Thank Flag Link Mon May 21, 2012
Thank you for that option although I am not prepared to buy just yet... I just wanted a little bit of info to get going... I'm actually looking to buy towards the end of the year or next year even... Thank you again and Good Luck
Flag Mon May 21, 2012
Jim Walker, Real Estate Pro in Carmichael, CA
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 http://www.consumer-action.org/.

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. http://www.ftc.gov/bcp/edu/microsites/moneymatters/dealing-w…

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.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Mon May 21, 2012
Thank you for the advice and helpful links.
Flag Mon May 21, 2012
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