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My credit score is really low, like 564. Could I qualify for a direct loan? I also have a housing choice voucher. Which is best?

by milaaisha78 from Redmond, Washington. Mar 17th 2016 Reply


Tim Barlow (tim@cornerstonehomemortgage.com)
#113 ranked lender in Washington - 6 contributions

Like a usda Guaranteed? if so minimum score for the banks that i have for a USDA DIRECT would be 580. I"m not sure about the housing choice voucher.

Mar 17th 2016
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Tim Barlow (tim@cornerstonehomemortgage.com)
#113 ranked lender in Washington - 6 contributions

Whoops I'm sorry, on the USDA Guaranteed side i can do down to a 580. you may consider going direct to usda but i'[m not sure what score they will take but they also have an income maximum in order to qualify.

Mar 17th 2016
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 7,802 contributions

It takes much more than a credit score to qualify for a USDA loan.. and the minimum requirements for most lenders are 640, with some going down to 620, 600, and a hand full going down to 580.. However, to determine your eligibility, we would need to look at your complete loan profile including income, job, and most importantly, analyzing your credit to determine why the scores are so low.. Understand that certain derogatory credit events require minimum waiting periods, while other derogatory items must be corrected/paid in order to qualify.. so without looking at the complete loan profile it's impossible to say for sure.. You could go USDA direct, but there's greater flexibility by using a mortgage broker doing USDA guaranteed. .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Mar 17th 2016
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Larry Gray (lgray_312_247)
#562 ranked lender in California - 1,127 contributions

Generally you are best off getting your mid fico score to 580 or better. Now, the limitations on what you will be able to borrower are far lower than if you had a 620 mid fico score or better. You can actually qualify with a limited number of lenders with under 580 mid fico score but you must come up with a 10% down payment. With a mid fico score under 580 you also will likely need to show no late payments for the past 12 months of any kind. It is important to show you are on track for rebuilding credit even if your score is still only 564. I do recommend having a broker with experience at providing loans at these different score levels consulting with you. They may guide you to more quickly get to that 580 or higher fico so you only need put down 3.5% of the purchase amount.

Mar 17th 2016
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Jesse Stroup (jessestroup)
#193 ranked lender in California - 589 contributions

Each lender has a min credit requirement, you should call a local mortgage banker or broker to see what loans they offer for low credit scores. I hope this helps. Jesse Stroup | California Mortgage Professional | www.jessestroup.com | NMLS# 6229

Mar 18th 2016
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