Updated October 2026. For buyers with a low or damaged credit score who want to know which loans are realistic and what to fix first.
Can you buy a house with a bad credit score? Often, yes. As of October 2026, FHA loans allow 3.5% down with a score of at least 580, or 10% down with a score from 500 to 579 (Bankrate’s summary of FHA rules). Fannie Mae’s manually underwritten fixed-rate loans need 620. Expect higher costs, check your reports first, and get pre-approved before you shop.
Jump to: 💲 Score minimums · 🪜 Steps · 🏠 Condos · ⏱️ Waiting periods · ❓ FAQ
Key takeaways
- FHA: 580+ score with 3.5% down, or 500 to 579 with 10% down; lenders may ask for more.
- Fannie Mae: 620 for manually underwritten fixed-rate loans (640 for ARMs); loans run through its Desktop Underwriter system have no set minimum score.
- You can pull free credit reports from Equifax, Experian and TransUnion once a week at AnnualCreditReport.com (CFPB).
- After a Chapter 7 bankruptcy, Fannie Mae requires a four-year wait; after a foreclosure, seven years, with shorter exceptions for documented hardship.
Bad credit narrows your options and raises your rate. It doesn’t always close the door. Here’s what lenders look at, which loans fit lower scores, and what to do in what order.
What credit score do you need to buy a house?
It depends on the loan. Here’s what each major program says, from the sources we read on October 27, 2026.
| Loan type | Credit score | Minimum down payment | Notes |
|---|---|---|---|
| FHA | 580 or higher | 3.5% | Mortgage insurance required; lenders can set higher scores |
| FHA | 500 to 579 | 10% | Fewer lenders offer it |
| Conventional (Fannie Mae, manual underwriting) | 620 fixed rate, 640 ARM | Varies by loan | Desktop Underwriter files have no set minimum score |
| VA | Set by the lender | None if the price isn’t above the appraised value | For eligible service members and veterans; no monthly mortgage insurance |
Sources: FHA tiers from Bankrate’s FHA loan requirements; the 3.5% floor from HUD’s loans page; conventional scores from the Fannie Mae Selling Guide B3-5.1-01; VA terms from VA.gov. The HUD site also lists housing counselors who can review your file for free or at low cost.
A lower score usually means a higher interest rate or mortgage insurance cost. Even a 20- or 40-point gain can change what you pay, so it’s worth working on before you apply. Freddie Mac, the other big buyer of mortgages, publishes borrower education at Freddie Mac.
How do lenders look at bad credit?
The score is a starting point. Lenders also read the reports behind it: late payments, collections, how much of your credit you use, and any bankruptcy or foreclosure. They weigh that against income, savings and your debt-to-income ratio.
The Consumer Financial Protection Bureau defines DTI as all your monthly debt payments divided by gross monthly income. Its example: $2,000 in debts on $6,000 of income is 33%. Different loans and lenders set different limits, so a lower DTI can partly offset a weak score.
How do you buy a house with bad credit, step by step?
1. Pull your credit reports
The CFPB says you can get a free report from each of Equifax, Experian and TransUnion once a week at AnnualCreditReport.com. Dispute errors in writing; a wrong late payment or a debt that isn’t yours can cost real points.
2. Know your budget before you talk to a lender
Add up your monthly debts and income and work out your DTI. Then pick a payment you can live with, including taxes, insurance and any HOA fee. That answers the question many buyers search: you can know your budget before you’re approved.
3. Fix what’s quick
Pay every bill on time from now on, pay down card balances, and don’t open new accounts right before you apply. Our guides on improving your credit fast to qualify for a home loan and fixing credit to boost your approval odds go further.
4. Save more for the down payment and reserves
A bigger down payment lowers the lender’s risk. Going from 3.5% to 10% on an FHA loan is the difference between needing a 580 score and a 500 score.
5. Shop lenders, and compare offers
Lenders set their own score floors on top of program rules. Ask several for a Loan Estimate and compare the rate, fees and mortgage insurance. Rate tables on Bankrate give you a rough benchmark before you call. Our guide on getting a mortgage when your credit isn’t great lists the questions to ask.
6. Consider a co-borrower
A co-borrower with strong credit and income can help you qualify. They’re legally responsible for the loan too, so talk it through.
7. Get pre-approved, then shop for homes
A pre-approval tells sellers you’re serious and tells you your real price range. With thin credit rather than bad credit, see how to buy a house without using credit history.
Can you buy a condo with bad credit?
Yes, but the building matters as much as you do. For an FHA loan on a condo, the project generally needs FHA approval. HUD runs a public FHA-approved condominium search where you can look up a building by state, city or name, and check whether its approval is current or expired.
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On homes listed by other agents, Beycome credits you up to 2% of the price at closing (1% kept, $1,499 minimum; not on FSBO homes or homes listed by Beycome sellers).
Buy a home →VA loans work the same way: the VA.gov purchase loan page says you can buy a condo in a VA-approved project. Ask the HOA for its budget and reserves early, since lenders review the association’s finances too. Moving from a house to a condo? Our guide to moving from a house to a condo covers the trade-offs.
How long after bankruptcy or foreclosure can you buy?
For a conventional loan sold to Fannie Mae, its Selling Guide B3-5.3-07 sets these waiting periods:
- Chapter 7 or Chapter 11 bankruptcy: four years from discharge or dismissal, or two years with documented extenuating circumstances.
- Chapter 13 bankruptcy: two years from discharge, or four years from dismissal.
- Foreclosure: seven years from completion, or three years with documented extenuating circumstances.
- More than one bankruptcy in seven years: five years from the most recent one.
FHA and VA loans have their own waiting rules, which are often shorter. Ask your lender which apply to you, and use the time to rebuild a clean payment history.
What are the alternatives if you can’t qualify yet?
Rent while you rebuild, and save. Rent-to-own and lease-purchase deals exist, but read the contract with a lawyer: you can lose the option money if you don’t buy. Seller financing is another path some owners offer; again, get the terms reviewed. Our guides to buying a home with bad credit and no cash and buying land with bad credit cover those routes.
Once you own a home, protect the budget you worked for. A home warranty is one option some buyers use; see our review of Armadillo Home Solutions’ home warranty.
How can Beycome help a buyer with bad credit?
Beycome isn’t a lender, so it doesn’t change your score or approve loans. What it can do is lower the cash you need at closing. With the Beycome buyer program, there’s no upfront fee: Beycome keeps 1% of the price (minimum $1,499) and credits the rest of the buyer-agent commission at closing, with lender approval. On a $400,000 home with 3% offered, that’s $8,000 back. It’s open to every buyer on homes listed by other agents; the credit can’t apply where no buyer-agent commission is offered, like most FSBO homes, or on homes listed by Beycome sellers.
The 3% figure is an example only. Commissions are not set by law or NAR rules and are fully negotiable. Sellers choose whether to offer any buyer-agent compensation, and since August 17, 2024 those offers can’t be shown on the MLS. Selling a home first? See our home value estimate and flat fee MLS listing options.
Frequently asked questions about buying a house with bad credit
Can I buy a house with a credit score under 600?
Yes, often with an FHA loan: 580+ allows 3.5% down and 500 to 579 needs 10% down. Lenders can set higher floors, and rates are usually higher.
How much of a down payment is needed with bad credit?
With FHA, 3.5% at a 580+ score, or 10% at 500 to 579. VA loans can need no down payment for eligible buyers. A larger down payment can offset a weaker score.
Will having a co-signer help me qualify for a mortgage?
It can. A co-borrower with strong credit and income may improve approval and terms, but they’re fully responsible for the loan too.
What’s the best loan program for buyers with bad credit?
It depends on you. FHA has the lowest published score tiers; VA suits eligible veterans with no down payment. Compare Loan Estimates from several lenders.
Does a higher income offset bad credit when buying a home?
Partly. Income lowers your debt-to-income ratio, which lenders weigh alongside the score. It won’t erase recent late payments or a bankruptcy.
How long should I wait after a bankruptcy or foreclosure to buy?
For Fannie Mae loans, four years after Chapter 7 and seven after foreclosure, with shorter exceptions for documented hardship. FHA and VA set their own, often shorter, periods.
Do I need to disclose my bad credit to real estate agents?
No. The lender sees your credit, not the agent. Sharing your pre-approval amount is enough for an agent to show the right homes.
Can I negotiate with the seller if I have bad credit?
Yes. Price, closing cost credits and timing are all negotiable. A solid pre-approval matters more to sellers than your score.
Loan rules as read on October 27, 2026 and subject to change; lenders may add their own requirements. Buyer credit: minimum $1,499 kept by Beycome, lender approval required, not on FSBO homes or homes listed by Beycome sellers. Commission figures are examples only. General information, not financial or legal advice.
Sources
- Bankrate, FHA loan requirements, read October 27, 2026.
- HUD, loans, read October 27, 2026.
- Fannie Mae Selling Guide B3-5.1-01, credit scores.
- Fannie Mae Selling Guide B3-5.3-07, waiting periods.
- VA.gov, VA-backed purchase loan.
- CFPB, free credit reports.
- CFPB, debt-to-income ratio.
- HUD, FHA-approved condominium search.
- Beycome, buyer program terms, October 2026.
Disclosure & Disclaimer
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