Having collections (owing or not) from a few years ago isn't a dealbreaker to buy a home at all - was this a real estate agent or a mortgage loan officer who gave you the advice? If it was a real estate agent I'd recommend you speak with a mortgage loan officer instead. If you spoke with a loan officer and their only advice was to pay the collections then you need to speak to another one.
FHA, USDA & VA loan programs all do not require collections to be paid - and there should be plenty of homes available in McKees Rocks that fit within FHA's loan limit. Even conventional financing doesn't require collections to be paid unless the computer approval system says they need to. However you do need to have a qualifying credit score, and most lenders are looking for a 620 or 640 score, so if your score isn't at that level I'd recommend you continue to improve your credit by making all of your credit card payments on time, keeping credit card balances low, and going over your credit report to make sure there are no inaccuracies. You also need to have at least 12 months of clean credit, so besides the collections from a few years ago, if there are any more recent items such as late payments, charge-offs, or the like in the last 12 months, you would need to wait a little longer for those to be at least 12 months in the past.
What were the scores when the 'agent' checked your credit? Was it recent?... more