This year has proved to be a very good one for those who are in search of government loans for low credit scores. Not only are there a great many numbers of options available to homebuyers, but there is also much more leniency when it comes to the credit ratings. That being said, let’s explore the different loans that one has access to for homeownership.
As mentioned above, there are numerous government home loans available for people with low credit scores. The whole purpose of providing such loans is to provide easier access to home loans for those who tend to face rejection from private and other lenders due to bad credit. However, we are going to talk about a few of these government loans that one can apply for despite bad credit.
One of the most popular government loans among homebuyers today, the FHA loans program offers numerous benefits and the appeal of easier homeownership to those down on their luck. The whole intent behind this program is to increase the homeownership among the people. Therefore, one can expect to get approved with ratings as low as 500 and still only as low as 3.5% down payment.
VA HOME LOAN
A loan program specifically designed for the veterans, this is one of the best government loans for low credit scores out there. The Department of Veterans Affairs guarantees this loan; therefore, even if the person applies with a lower credit score, the lender is less reluctant about approving the loan application. With no down payment minimum requirement made and the lower interest rates, all combine to be a very appealing package for veterans searching for a great low credit score government loan.
An ideal home loan option for those in search of properties in the rural areas of the country, the USDA loan program allows loans to be approved with 100% financing with the credit score to be as low as 620. However, the only stipulation for this loan is that the home must be purchased in those areas which the USDA has listed to be rural.