is it hard to be financed to buy a home with really no credit?

Asked by Vatanya Payne, Wed Aug 14, 2013

credit was always in my kids father name and never really mine so now that he has passed away in 2010 i have found out i have no credit which is like having bad credit. i havent checked but with my income which is really not a whole lot i could probable do HUD. this is what ive heard so how true that is im not really sure. but im just wondering is it really difficult to be financed to buy a home.

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allan erps,A…, Agent, Pearl River, NY
Wed Aug 14, 2013
Truthfully it will be starting over to establish credit lines, etc. Possibly look into establishing a few lines of credit first & getting some help with this. Best of Luck
1 vote
Brian Nguyen, Mortgage Broker Or Lender, Mission Viejo, CA
Mon Feb 24, 2014
If you are a first-time home buyer you should consider getting an FHA loan. This loan is designed to help out first-time home buyers because FHA loans usually means low down payments, low closing costs, and easy credit qualifying. FHA loans will usually allow for lower credit scores as long as it is over 500.

Also, for your scenario FHA loans make allowances for loan applicants with a non-traditional credit history or insufficient credit. These types of loan applicants may be able to be approved for an FHA loan if they meet FHA requirements for such circumstances. Some of these requirements include references that can be taken from the following: rental housing payments, utility company references (gas, electricity, water, cable, etc.), school tuition, automobile leases, insurance premiums, retail store credit cards, and a documented 12 month history of savings from a bank. These are all ways in which a lender will review your credit without actually having credit.

Well I hope this helps! If you have any more questions or if you need a loan, feel free to contact me through the contact information on my profile page!

*The information I gave above was taken from the HUD Handbook so if you want more information check out section 1-C-9 from the handbook in this link:…

Brian Nguyen
Sr. Mortgage Banker
NMLS # 659743
Phone: 949.667.2887
0 votes
Trevor Curran, Mortgage Broker Or Lender, Great Neck, NY
Wed Aug 14, 2013
Good evening Vatanya,

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.

Trevor Curran
NMLS #40140

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0 votes
Solomon Gree…, Agent, Duluth, GA
Wed Aug 14, 2013
Hello Ms. Payne

Please accept my condolences for your loss. You may meet the guidelines as a first time home buyer. Many lenders participate in first time home buyer programs and have advised that persons with no credit can, in fact, be approved to buy a home under those programs. They do, however, often ask that some alternative form of credit be in use. My clients have been able to use statements from their cell phone, utility, insurance and other similar companies where payments were made on a regular basis to meet the alternative credit standard. You might consider speaking with a local, knowledgeable lender about the best program for you.

Hope that helps.
Solomon Greene
Associate Broker, REALTOR®
Certified Affordable Housing Counselor
Keller Williams Realty Atlanta Partners
(678) 775-2677
0 votes
Lynel Adams, , Gainesville, GA
Wed Aug 14, 2013
Dear Ms. Payne:

Today's market is a little different with all the "overlays" that investors of the loans put out there. The rule of thumb right now is to have 1. Rental and 3. Tradelines that have 12 mos history min. The best way to establish and get the ball rolling is to see if a family member can put you on a small credit card, one with a small balance and maybe even paid off each month. One that has been open for 12 mos or more. Best example would be a small dept store card that may be used only for sales at Christmas and then paid off. The family member can put you on as "joint" user and then the other cards should be offered to you.

I would also call every source of alternative credit and get a letter of credit as well. That would be cell, insurance, utilities, cable, etc. keep those letters handy for a Loan Officer may ask for them. Letter of Credit would explain how long your account has been open with them and you pay on a timely basis, on letter head.

If I can be a source of any further information to help you with this process, please do not hesitate to call me. I am happy to share the 23 years of mortgage knowledge I have stored and the new that comes each and every day.

Thank you again.

Lynel Adams
Sr. Mortgage Loan Officer
Silverton Mortgage Specialist, Inc
NMLS 359696
0 votes
Peter Andres, Agent, Melville, NY
Wed Aug 14, 2013
Go to an FHA approved lender and ask about "manual underwriting guidelines"
0 votes
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