Do subprime mortgages or any other options for credit scores below 620 still exist for 2010 post mtge crisis? What affect will a discharged Ch 7 have?

Asked by Nytodc, Washington, DC Sun Jan 17, 2010

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Kelly Putz, Agent, Fairfax, VA
Sun Jan 17, 2010
Hey Nytodc,

I beg to differ with Lew, but if you are looking to buy in a rural area, and with the exception of Leesburg, ALL of Loudoun County, Virginia (suburbs of DC) is considered rural by USDA, as well as Frederick County, Maryland, which is along the MARC commuter line within an hour of DC, then you could qualify for a 100% mortgage backed by USDA, even with bad credit and a bankruptcy. USDA even offers up to a 102% loan and there is no PMI.

There are two ways to obtain a USDA mortgage:
1) Find a lender familiar with this particular mortgage. Typically a smaller bank in a rural area, because that's their market. The big banks in DC and Fairfax won't even talk to you about it, or even know about it, because they typically have no one in-house who has ever done one. I can recommend a lender or two familiar with this loan.
2) If your credit score is not good enough for the bank to work with you, you CAN apply yourself directly with USDA. I had a client do this and got the loan when the bank couldn't help her. She had really terrible credit, but she did all the paperwork herself and it was an ordeal, but she got the loan that let her buy her first home and has now been there happily for three years.

Here is the USDA website with info on this program:…

If you need any help with your home search, please feel free to contact me. I'm licensed in DC, MD and VA and work both the metro area as well as the rural areas of Loudoun and Frederick Counties.

Good luck!
Kelly Putz
Kangal Real Estate
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Lew Corcoran, Agent, Easton, MA
Sun Jan 17, 2010
There are virtually no lenders offering mortgages today to anyone whose credit scores are below 620. Some now require minimum credit scores of 640.

If you had a Chapter 7 bankruptcy, you must wait at least 2 year before you can get an FHA mortgage. In addition, you must have re-established your credit, and you can not be late on any accounts since the bankruptcy. Lenders will be looking to to se that you can handle your finances after you've had a bankruptcy.
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