what are some alternatives to owning a home with bad credit and little or no down payment? is it impossible?

Asked by Wifey To Be, Louisville, KY Sun Feb 24, 2013

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Joel Lobb’s answer
Joel Lobb, Mortgage Broker Or Lender, Louisville, KY
Sun May 5, 2013
Neighborhood Down payment Assistance Program (DAP)
Kentucky Housing Corporation (KHC) received $3 million from the National Mortgage Foreclosure Settlement Fund to offer a new mortgage program for down payment and closing costs assistance. This program is only available until all funds are gone.
Repayable second mortgage up to $10,000
1 percent interest rate for 30 years.
Income must be less than $124,775 (terms and conditions apply).
To be eligible for the Neighborhood DAP, either:
The property must be in the process of disposition option (i.e., deed-in-lieu, short sale) or foreclosed upon.
The newly-constructed or existing property has been for sale for at least six months.
The home buyer has experienced a foreclosure and credit qualifies to purchase another home.
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Joel Lobb, Mortgage Broker Or Lender, Louisville, KY
Wed May 1, 2013
Whereas the mortgage is widely used when a lending institution is involved, the contract for deed is frequently used in transactions between private parties. A contract for deed is also known as a "land contract" or "installment land contract." In a contract for deed, the seller, rather than a lending institution, finances the buyer's purchase of the property. The buyer takes immediate possession of the property and agrees to pay the purchase price of the property in monthly installment. The seller retains the legal title to the property until the last payment is made and the contract is fulfilled.
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Jean Petri, , Louisville, KY
Sun Mar 10, 2013
Lease with option to purchase with the owner of the property, but I would work on getting my credit restored.
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Becky Lusch, Agent, Louisville, KY
Sun Mar 3, 2013
Your best avenue would be to repair your credit. There are some very reputable companies that can help. Time is your best friend when it comes to credit repair. Pay your bills on time for12-24 months and you will see your score significantly improve. If you would like the names of a couple of credit repair companies email me beckylusch@kw.com.
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David Pauley, , Louisville, KY
Mon Feb 25, 2013
Have you had a mortgage originator review your credit? It is possible to get a mortgage with lower credit scores, based on certain information that is available on your credit report.

Outside of that, if could be possible to find a homeowner that would be willing to sell you their home on a contract for deed. That way you would be developing an equity position in the home and could refinance it at a later date.
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Blair Whyte, Agent, Louisville, KY
Sun Feb 24, 2013
Maybe KHC financing, I have a client looking into that option which seems similar to yours, call me at 502-777-4533 if I can help.

Blair Whyte , Rainey, Jones, and Shaw Realtors
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Connie Fitzg…, Agent, California, MD
Sun Feb 24, 2013
Though possible in rare cases, it would be better to re-evaluate where you stand before taking on ownership. You will qualify for more house if you increase your credit and will feel more comfortable in the home buying process if you have out of pocket money to put toward your home. It is important to be financially comfortable throughout the process so that you are under less stress and can maintain future payments and upkeep. Alternatives may be renting, if you can find a landlord who is willing to work with you.
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Neil Blumberg, Agent, Louisville, KY
Sun Feb 24, 2013
Realistically, it is impossible to gain ownership with bad credit and little or no down payment. And if by some miracle you were offered such a deal, it would be very risky from your standpoint - there would almost certainly be a major defect in the house itself, the title to it or some other aspect of the deal. If it sounds too good to be true, it is. Good luck!
Web Reference:  http://metro1realty.com
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Rick Schmidt, Agent, Louisville, KY
Sun Feb 24, 2013
You may find it's tough to even lease a home, since the lessor will require at least 2 months rent in advance. In addition, most landlords are now doing extensive credit checks on any potential tenant, so your low credit score, if discovered, will also be a big negative. Finally, good rental homes are hard to find with demand exceeding supply, so landlords can be picky. Good luck!!
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