Best Mortgage Loans for Bad Credit

Are you in the market for a home loan but worried that your credit will keep you from getting approved? A less than perfect credit score is not the end of the world, and it surely isn’t enough to keep you from getting approved for a mortgage. Check out this list of the best mortgage loans for bad credit to help make your dreams of homeownership a reality.

Carrington Mortgage Services

Carrington Mortgage Services offers several mortgage products to prospective borrowers with credit scores as low as 500. Bad credit mortgage products include the following:

  • Adjustable Rate Mortgage (ARM) Loan- minimum credit score of 500 and ideal for customers looking for a lower interest rate for the first few years of the loan term and plan to refinance later on down the line to secure a fixed rate. This loan grants you a lower interest rate and monthly mortgage payment for the first five years of the loa.
  • Carrington Flexible Advantage Loan- minimum credit score of 500 and Ideal for prospective borrowers with serious credit issues, including a recent bankruptcy, foreclosure, late payments, or short sale. You can borrow up to $2 million with this loan.
  • Federal Housing Administration (FHA) Loan- minimum credit score of 500 and ideal for first-time homebuyers. FHA loans allow a low downpayment and have flexible qualification criteria.
  • US Department of Agriculture (USDA) Loan- minimum credit score of 500 and ideal for prospective low-income homebuyers looking to build or purchase in a rural area. The qualification criteria are flexible and 100 percent financing available. Furthermore, cash reserves not required to qualify and close the loan.
  • Veterans Affairs (VA) Loan- minimum credit score of 500 and ideal for active and retired members of the armed forces and their family members. VA loans are accompanied by low-interest rates and 100 percent financing is available.

To learn more about their loan products, use the “Find An Expert” tool on their website to search for loan officers by state. You can also find the physical address, phone number, and hours of operation of their offices around the U.S. They currently have offices in Arizona, California, Connecticut, Florida, Indiana, and Maryland.


CitiMortgage also offers mortgage products to help credit challenged borrowers fulfill their dreams of owning a new home. They include:

  • FHA loans- a good fit for first-time home buyers with less than perfect credit. This loan product is also ideal for those who have only been employed for a limited period of time or who are self-employed.
  • HomeRun mortgage- a good fit for individuals looking for high-valued (up to $453,100 and $679,650 in more expensive areas) loans that don’t have excellent credit. Borrowers can put down as little as 3 percent, and mortgage insurance is not required.
  • VA Home loans- a good fit for current and retired members of the U.S. Armed Forces and their family members. Qualified borrowers have access to competitive financing, lower closing costs, and affordable (if any) down payment options.

Homebridge Financial Services

With an FHA Loan from HomeBrdige Financial Services, you can purchase the home of your dreams even if you fall into the low-income bracket and your credit isn’t perfect. And if you’re a veteran, you may also qualify for a VA loan that is financing at 100 percent.

They also have mortgage loan originators standing by to help you find the best mortgage product for your financial situation. And by completing a brief online questionnaire that only takes a few minutes and does not impact your credit score, you’ll prompt their customer support team to connect you with a loan officer that will work with you to secure the funding you need.

Navy Federal Credit Union

Navy Federal Credit Union offers an array of mortgage loan products to servicemembers, veterans, and their family members even if they have bad credit. You must become a member to apply. And upon acceptance, you can explore several loan options that are ideal for borrowers with bad credit, including:

  • Adjustable-Rate Mortgages (ARMs)- grants you lower interest rates and monthly payments for the first few years of the loan term.
  • FHA Loans- caters to first-time homebuyers and doesn’t require a hefty down payment.
  • Military Choice Loans- 100 percent financing available, and the 1.75 percent funding fee can be rolled into the loan. Borrowers can also borrow up to $1 million through the Jumbo loan product.
  • VA Loans- caters to veterans and offers 100 percent financing.
  • 100% Financing HomeBuyers Choice- flexible loan option that can be tailored to fit a borrower’s needs.

New American Funding

Headquartered in Orange County, California, New American Funding is a direct mortgage lender that’s been around for over 15 years. They have over 185 branches around the U.S. and currently service over 108,000 loans worth $27 billion. Furthermore, they see each prospective borrower as more than just a piece of paper and go the extra mile to ensure their needs are met.

With their veteran experience in success in the mortgage lending marketplace, they have several options to help consumers with credit woes secure the funds they need to buy a home. Their offerings include:

  • ARMs- allows you to take advantage of lower interest rates and more affordable payments for a set period of time.
  • Conventional Loans- lower down payments and flexible terms.
  • FHA Loans- designed for first-time home buyers with limited income or less than perfect credit and offers lower down payments.
  • Home Improvement Loans- ideal if you’re planning to purchase a fixer-upper.
  • I CAN Morgage- allows borrowers to tailor their loan term (from 8 to 30 years) to best suit their financial needs.
  • USDA Loans- available to borrowers with less than perfect credit and doesn’t require a down payment.
  • VA Loans- designed for active duty service members and veterans, and 100 percent financing available for qualified applicants.

You can apply online or use the tool found on their website to speak with a mortgage professional to explore loan options and determine which one is the best fit for you.

Pacific Union Financial

Pacific Union Financial is another direct lender that sees their prospective customers as more than just a credit score. They firmly believe that securing a mortgage shouldn’t be yet another arduous process, and they offer tailored solutions even if your credit is less than perfect.

They even go the extra mile to provide online tools that will help you understand your loan options and select a product that is right for your financial situation. You can visit one of their locations in Arizona or Texas to speak with a loan officer or call 800-809-0421 to learn more about their loan offerings and determine if they can serve you.


Vylla has tailored loan solutions that cater to low credit buyers. In fact, you can get approved for a mortgage with a credit score of 500 and down payment of 10 percent if your employment and income checks out. And if your score is at least 580, that 10 percent drops to 3.5 percent.

With offices around the nation, they have loan officers standing by to assist you with your mortgage needs. Or you can call 888-278-9552, submit an inquiry online, or send an email to and a customer service representative will be in touch with you right away.

The Bottom Line

Even if your credit is blemished, it may be possible to get approved for a mortgage. And by starting your search far in advance before you need to move, you’ll give yourself the best possible chance of finding a lender that will work with you.

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