Bad Credit Mortgage Lenders

15 Best Bad Credit Mortgage Lenders Of 2023, Down Payment

If you want to choose the best bad credit mortgage lenders, you come to the right place. If you have bad credit but still want to buy a home, refinance, or invest in real estate, here are the 15 best mortgage lenders to work with. You can find the best lender to meet your needs thanks to their affordable rates and friendly service.

PowerPACPlus’s Summary

  • Requires help from a loan officer to complete an online application.
  • The maximum debt-to-income ratio is 50%.
  • Why we chose it Prosperity Home is our pick as the best overall lender for borrowers with poor or fair credit ratings for their range of products and homebuyer assistance programs.
  • Borrowers can apply for a mortgage online or in person at a local branch.
  • With a Cherry Creek, you can qualify for a no-down payment VA loan or personal mortgage insurance.

Overview Of Bad Credit Mortgage Lenders

Your credit rating tells mortgage lenders how likely you are to repay the money you borrowed. A high score sends the right signals, while a bad credit score, sometimes referred to as “bad credit,” can keep you from getting approved. When it comes to home buying, bad credit generally falls below 620.

The credit required to buy a home depends on the type of loan. Government-backed lending programs—FHA, VA, and USDA—generally have lower credit requirements than traditional mortgage. But it is the lender who ultimately decides what the minimum credit rating will be for each loan product.

The Lender considers more than just creditworthiness when evaluating an applicant. If your score is at or near a lender’s minimum, they might ask for a larger down payment, charge a higher interest rate, or ask you to pay more fees.

In short, you could end up paying more on your homeloan. The best way to avoid these penalties is to raise your score before applying.

Mortgage Lenders with low scores

Top 15 Best Mortgage Lenders For Bad Credit Of 2023

Have a look on the list of comparing mortgage interest rates of 2023

1. New American Funding

New American Funding mortgage lender logo
  • Min. credit: 580
  • Min. deposit: 0%
  • Good For: First-time homebuyers and other borrowers looking for a wide variety of loan choices.


  • Offers a wide variety of purchase and refinancing mortgage with an emphasis on helping underserved communities.
  • The equity line of credit can be used for an owner-occupied or second home.
  • Provides a program to enable buyers to make cash offers.


According to the latest federal data, mortgage creation costs tend to be on the high side.

2. Northpointe Bank

Northpointe bank logo
  • Min. creditworthiness: 620
  • Min. deposit: 3.5%
  • Good for: People looking for a plethora of loan offers, including a no down payment that helps accelerate equity building


  • A complete list of loan offers.
  • Offers a no-deposit loan with a shorter repayment term that helps accelerate equity building.
  • Digital conveniences include a mobile app.


  • You must provide contact information or speak to a loan officer for adjusted mortgage rates.
  • The origination fees are on the high side according to the latest data.

3. Citibank

Citibank for mortgage lending logo
  • National / regional: national
  • Min. deposit: 3.5%
  • Why we like it
  • Good for: Buyers looking to explore low-down mortgage, including government-backed loans and Citi’s proprietary option.


  • Offers a wide variety of loan options, including low down payment and jumbo mortgage.
  • Offers low rates compared to other companies, according to the latest data.
  • Gets high marks for customer satisfaction, according to JD Power and Zillow.


  • Requires help from a loan officer to complete an online application.
  • Customized rates are not possible without contact.
  • Does not offer renovation loans

4. Mr Cooper

Mr Cooper home loan logo
  • Min. creditworthiness: 580
  • Min. deposit: 3.5%
  • Good for: Tech-savvy borrowers looking for lower credit score requirements and a mobile app that goes beyond the basics.


  • Has a robust digital experience and mobile app.
  • Offers a 45-day block option.


  • Requires a call or email for personalized rates.
  • Does not offer mortgages or lines of credit, or home improvement loans.

5. Alterra

Alterra home loans logo
  • Min. deposit: 3.5%
  • National / regional: Regional
  • Good for: first-time buyers on the housing market and people who are not eligible for social security numbers


  • Provides an ITIN qualification path for borrowers who are not eligible for Social Security Numbers.
  • Has a digital application procedure.
  • Provides government-backed mortgage options for low to middle income borrowers.


  • No interest published online.
  • No mortgages or lines of credit.
  • Generally has higher rates and fees than other mortgage lenders.
  • Branches are not available in all states.

6. Homebridge

Homebridge lender logo
  • min. creditworthiness: 550
  • min. deposit: 3.5%
  • Good for borrowers who want the assistance of a loan officer, in person or on the phone, in choosing from the wide range of options available – including loans to buy and renovate


  • Offers a full range of products, including government and renovation loans.
  • Online portal keeps borrowers informed about the progress of the loan application.
  • Offers home equity lines of credit or HELOCs.


  • Do not post interest rates on his site.
  • Fees are on the high side, according to the latest federal data.

7. Watermark Home Loans

Watermark Home Loans logo
  • Min. creditworthiness: 580
  • Min. deposit: 3.5%
  • Good for: Borrowers looking for a solid selection of loan types with some not-so-standard options, such as non-QM loans.


  • Online capabilities include a full application, as well as updates to the lending process.
  • Offers low rates in comparison to other companies, according to the latest federal data


  • Watermark’s interest rates are not published online.
  • Watermark says it offers HELOCs, but no details are available online.

8. Caliber

Caliber home loans logo
  • min. creditworthiness: 580
  • min. deposit: 3.5%
  • Good For: First-time homebuyers, veterans, and those who may need to overcome credit challenges.


  • Provides comprehensive learning resources for military borrowers.
  • Participates in a number of down payment and first home buying programs.


  • No mortgage interest displayed online.
  • Does not offer mortgages or lines of credit.

9. Carrington

Carrington home loans logo
  • min. creditworthiness: 500
  • min. deposit:3.5%
  • Good for: first-time home buyers or borrowers with a credit problem who are interested in government loans


  • Offers multiple loan programs with a low down payment.
  • May consider alternative credit details such as bank statements.
  • You can view and request custom rates for buying a home online.


  • Does not offer equity lines of credit.
  • Fees are on the high side, according to the latest federal data

10. Prosperity Home Mortgages

Prosperity Home Mortgages logo
  • Minimum score: 600 (conventional loans)
  • The maximum debt-to-income ratio is 50%.


  • 3% minimum deposit
  • Provides a variety of options with low deposit requirements.
  • Credit of $1,500 for closing costs or down payments
  • Personal attention is possible.


  • This product is not available in New York or Hawaii.
  • Does not publish its prices or fees on the internet.
  • Its requirements for credit are not disclosed.

Why we chose it

Prosperity Home is our pick as the best overall lender for borrowers with poor or fair credit ratings for their range of products and homebuyer assistance programs.

Although the company doesn’t list its score requirements online, a company representative tells us that the minimum score is about 600 — a lower minimum than some others require. It also allows borrowers to have a debt-to-income ratio of up to 50%, which is higher than many other lenders.

Borrowers who are struggling to qualify for mortgage from other companies may also benefit from the lender’s BorrowSmart program. Eligible borrowers can receive up to $1,500 in closing cost credit or mortgage down payment, allowing you to buy a home with less than 3% down payment.

Prosperity also participates in FannieMae’s HomeReady program, a mortgage option that helps borrowers in designated low-income, minority and disaster-hit communities become homeowners. With the HomeReady program, borrowers can only repay 3%.

Prosperity offers a variety of products including:

  • Traditional loans with fixed or variable interest rates
  • FannieMae HomeReady
  • FHA
  • V.A
  • USDA
  • jumbo

Prosperity is a full-service lender operating 700 offices across the United States and originating loans in 48 states. Borrowers can apply for a mortgage online or in person at a local branch.

11. Cherry Creek Mortgage

Cherry Creek Mortgage logo
  • Minimum credit rating: 620 (conventional loans)
  • Maximum debt to income ratio: 50%
  • Minimum deposit: 3%


  • Low deposit options
  • Accepts scores up to 580
  • Online calculator available


  • Not available in all states
  • Cannot apply online
  • Information about unlisted fees

Why we chose it

Cherry Creek is a leading lender offering VA loans to current active military personnel, honorably discharged veterans, reserve members, eligible surviving spouses and those who have achieved veteran status through civilian employment.

With a Cherry Creek, you can qualify for a no-down payment VA loan or personal mortgage insurance. And the VA finance fee can go towards your loan.

Cherry Creek offers a number of other mortgage products, including those with a down payment requirement as low as 3%. If you want to qualify for an FHA loan, you can qualify with a score as low as 580.

Cherry Creek was founded in 1987. Since its inception, the lender has originated over $78 billion in loans. Cherry Creek Makes Loans in 41 States, But Borrowers Can’t Apply Online; You must work with a loan officer to get details on interest rates and fees and to submit a loan application.

12. Better.Com

Better.Com loans logo
  • Min credit score of 620 (conventional loans)
  • Maximum debt to income ratio: 50%
  • Minimum Deposit: Not disclosed


  • Easy online process
  • No origination fees
  • No commissions


  • Does not offer VA or USDA loans
  • All loans require down payments
  • Not available in Nevada

Why we chose it

Better Mortgage is our pick as one of the best online lenders because of its simple and fast digital platform. Borrowers can get an interest rate estimate in seconds and, if they decide to apply for a loan, complete each step of the application process online. Also, Better does not charge any setup fees or commissions.

Although has a minimum credit rating requirement of 620 for traditional loans, it also offers FHA loans.

These loans can be attractive to borrowers with poor credit ratings because a 10% down payment can qualify you with a score of just 500.

Better has a strong reputation for customer service; In the J.D. Power US Primary Mortgage Origination Satisfaction Study ranked it 7th out of 23 lenders, with a score above the industry average.

Unfortunately, Better does not offer other government-backed loans such as USDA or VA loans. These are popular loans for eligible borrowers as they have a 0% down payment requirement, but borrowers have to work with another lender to take advantage of them.

Better was launched in 2014.

It makes loans to borrowers in every state except Nevada.

13. SWBC

SWBC mortgage logo
  • Minimum credit rating: 600 (conventional loans)
  • Maximum debt to income ratio: 50%
  • Minimum deposit: 3%


  • Fast closing time
  • Offers renovation mortgage
  • Multiple government-backed options for loan


  • Not available in all states
  • Does not list its fees online
  • You must submit your information to view the rates

Why we chose it

SWBC had the fastest average time to close. According to the lender, most loans end in less than three weeks, allowing you to move into your dream home sooner.

SWBC offers several loan products, including government-backed options such as FHA, VA, and USDA. In addition, SWBC offers jumbo loans, conventional loans, and renovation.

SWBC also participates in the Veterans Housing Assistance Program (VHAP) for military veterans who purchase a home in Texas. Eligible borrowers may qualify for a loan with little to no down payment and borrowers may qualify for interest rebates.

Although SWBC doesn’t list its minimum requirement of credit online, a customer service representative told us that a score of 600 or higher is required. In order to view fees and current tariffs, you must provide your personal information.

SWBC does not lend to all borrowers; It is only available in 42 states.

14. Rocket Mortgage

Rocket Mortgage logo
  • Annual Percentage Rate (APR)
  • Apply online for personalized rates
  • Loan types: Conventional Loans, FHA, VA Loans, and Jumbo Loans
  • conditions: 8 – 29 years, including terms of 15 and 30 years
  • credit required: Typically requires a score of 620, but will consider applicants with a 580 as long as other eligibility criteria are met
  • minimum deposit: 3.5% if proceeding with an FHA loan


  • May use the loan to purchase or refinance a single family home, second home, or investment property or condo
  • Can be pre-qualified in minutes
  • Rocket App for easy access to your account


  • Performs a tough request to provide a personalized interest rate, which means your score may suffer a little damage
  • Does not offer USDA loans, HELOCs, house loans or RV
  • Does not manage jumbo loan accounts after closing

Rocket is one of the largest lenders in the United States and has recently gained notoriety. While most other companies require a score of at least 620, Rocket accepts applicants with as low as 580.

15. Navy Federal Credit Union – Best for a VA loan

Navy Federal Credit Union Logo
  • Annual Percentage Rate (APR)
  • Apply online for personalized rates
  • Kinds of loans: Traditional Loans, VA Loans, Military Choice Loans, Homebuyers Choice Loans, Adjustable Rate Mortgage
  • conditions: 10 – 30 years
  • credit needed: Not disclosed, but the lender is flexible
  • minimum deposit: 0%; 5% for conventional option for loan


  • 0% deposit for most credit options
  • flexible loan terms from 10 to 30 years
  • Provides refinancing, second home financing and investment property loans
  • No PMI required
  • Fast pre-approval
  • The RealtyPlus program allows applicants to receive up to $9,000 in cashback


  • To apply, you must be a Navy Federal Credit Union member.

Current or retired members of the Armed Forces who have signed up for a membership receive the most benefits (immediate family members are also eligible).

While Navy Federal CU does not disclose its required minimum score of credit, it does work with members to analyze their circumstances and find the best mortgage fit for them, making Navy Federal CU a potentially more flexible lender if your score is on the lower end.

Homebuyers who use the RealtyPlus program can get up to $9,000 in cash back. PMI, or private mortgage insurance, is also not required for a low down payment on a mortgage through this vendor.

How To Get A Mortgage With Bad Credit?

Lenders consider four main factors when considering a mortgage application:

  • Your creditworthiness
  • The amount of debt you carry compared to the income you receive, also known as the debt-to-income ratio, or DTI
  • Your professional career
  • The amount of your deposit

Two or three positive factors can outweigh one negative. Here’s what you can do to improve each of them and increase your chances of mortgage approval.

1. Creditworthiness

Your credit rating can determine what kinds of loans for home you are eligible for, the interest rate you are offered, and the down payment you are required to make.

Although you might be able to qualify for a mortgage with a rating of just 500, you would need to be able to put down a 10% down payment — and you probably wouldn’t get a great interest rate.

Improving your score takes time, but a higher score can help you start your house loan on better terms and save you money in the long run.

2. Debt to income ratio

To calculate your debt-to-income ratio, or DTI, a lender divides the total of your monthly debt obligations (things like car payments or student loans) by your monthly pre-tax income.

Most companies will look for a DTI that is 36% or less. A lender that qualifies you with a higher DTI is likely to charge you a higher interest rate.

You can lower your DTI by paying off existing debt. While you are preparing to buy a home and during the home buying process, you should not take on any additional debt or make any major purchases.

3. Employment history

You cannot change your employment history, but you can do your best to ensure your employment status is stable before you start applying for a mortgage. Changing jobs during the underwriting period can affect how much a lender is willing to loan you.

4. Deposit

The amount of down payment required depends on what loan type for home you are getting. If you are in the military, you may qualify for a mortgage backed by the Department of Veterans Affairs.

VA loans do not allow down payment. USDA loans, which are insured by the US Department of Agriculture and are designed to help lower-income borrowers living outside of urban areas, also have no down payment requirements.

Loans backed by the Federal Housing Administration can be beneficial for borrowers with bad credit, since FHA loans tend to allow for lower minimum scores of credit. If your score is at least 580, you may be able to make a down payment as low as 3.5%. FHA loans also allow borrowers to use donated money for down payment.

Being able to put down a higher down payment can help make up for a lower rating that your lender sees. Government-sponsored programs for first-time homebuyers offer down payment assistance and grants that can improve your borrowing capacity.

What Type Of Mortgage Can I Get With Bad Credit Home Loan Options?

While some lenders provide conventional credit to homebuyers without good credit, you can often get cheaper financing by insuring a bad credit home loan with a government agency. Not only do these mortgages have relaxed requirements, but they also require lower down payments than most traditional ones.

There are three main government-backed loan options that might be available to borrowers looking for bad credit loans.

FHA Loan

FHA loans are issued by private lenders but are backed by the Federal Housing Administration. You can qualify for one with a score of 580 and a 3.5% deposit, or just 500 and a 10% deposit. There are no minimum income requirements, although they must determine whether the prospective homeowner has sufficient income to repay the loan.

VA Loan

VA loans are also issued by private lenders, but this time the Department of Veterans Affairs guarantees the loan and not the FHA. There is no minimum credit rating requirement imposed by the VA.

Also, no deposit is required unless the home is valued for less than what you are paying for it. You must be a service member or have a record of military service, although surviving spouses of service members and wives are also eligible.


The US Department of Agriculture offers two programs for prospective home buyers. Section 502 Direct Loans are issued directly by the USDA and are only available to limited-income borrowers who are buying real estate in rural areas.

The USDA also guarantees loans to low-income borrowers, although the income limits for these loans are higher from private companies. USDA loans require no down payment, interest rates are often lower than you would pay on a traditional loan, and you can qualify even with imperfect credit.

How To Find The Best Mortgage Rate If You Have Bad Or Low Credit Score?

Some lenders specialize in “premium” borrowers who have excellent credit, bulletproof finances, and large down payments.

But others, including the six on our list, help those with compromised credit ratings.

So take a look around to see who can get you the best deal. And if one lender turns you down, don’t assume everyone will – because that’s not how mortgage loans work.

Each lender’s business priorities can change from day to day. And different companies offer different deals.

So if you put some effort into comparing purchases, you can find the loan you want at the best interest rate you can get.

Mortgage Lenders That Accept 500 Credit Score

The list of bad credit companies below is just a small selection of who can help if you have a score of just 500. Keep in mind that there are many more than what you see below and due to different lending policies, each of them may not be an option for you. We can help you find out which lender best suits your credit scenario.

Licensed in all 50 states, Carrington offers some programs for people with bad credit. You can qualify with a score as low as 500

Angel Oak is another subprime lender that approves for a mortgage with a low credit score. However, they are not licensed in all 50 states and their policies change frequently.

Citadel also offers subprime mortgage solutions that include bad credit assistance programs. They are licensed in part of the United States and can help you even if you don’t have a social security number

FNBA has historically offered mortgages for ratings as low as 500. However, it seems that they are raising their minimum requirements a bit lately. You have the ability to finance people with no credit history. For this reason we list them here.

Athas Capital is a national lender that offers some unique programs. However, their niche is investment property and not so much when trying to finance your primary residence.

How To Buy A House With Low Credit But You Have A Good Income?

In order to buy a house with low credit but you have a good income, there are a few options for convincing a lender to give you a loan.

  • Making a larger-than-usual down payment is one option. This reduces the lender’s risk and may persuade them to lend you money.
  • The other option is to use a special type of loan, such as an FHA mortgage, which has fewer requirements than a conventional mortgage.

Mortgage Loans That Allow A Credit Rating Of 600

Borrowing options for first-time homebuyers and repeat borrowers financing a home with a 600 score include:

These are government loans that are insured by the Federal Housing Administration (FHA). FHA loans are intended for people with lower ratings; They allow a minimum credit score between 500 and 580. If your FICO score is below 580, you require a 10% deposit. If it is above 580, you only need to bet 3.5% down.

These Loans have no minimum credit score requirements, so it is possible to get this type of loan with a score of 600. Lenders set their own minimum amounts, which usually range from $580 to $660. Eligible veterans and service members can get a VA loan with no down payment.

Non-QM loans are for people who don’t fit into the traditional lending box but are still reliable borrowers. Non-QM loans are typically offered by banks that have the resources to set up and operate their own unique programs.

You can look for one yourself or work with mortgage brokers who can recommend loan products that you are likely to qualify for. Keep in mind that non-QM loan programs typically have significantly higher interest rates

Home Loan Lender With Poor Credit And No Down Payment

While it’s always better to pay a deposit, sometimes it’s just not feasible. With no down payment, your options are much more limited and may cost you more in the long run, but there are options.

Get private mortgage insurance

For most lenders, paying less than 20% down on your loan makes you a risky investment. To counter this risk, almost anyone paying less than 20% on their mortgage is likely to pay some form of insurance, which compensates the lender if you default on your loan.

Taking out a higher insurance premium can reduce the amount of down payment you have to make, with some qualifying for 0% down payment loans with adequate insurance.

Bank of America Mortgage

  • Loan programs include down payment and assistance with closing costs.
  • Variable and fixed rate loans available with flexible qualification policies.
  • Up to 100% financing – with only zero down payment for qualified borrowers.
  • No maximum income/earnings caps.

Citi Mortgage

  • Little or no deposit required; flexible credit policies.
  • The seller can contribute up to 6% of the sale price.
  • Streamlined refinancing programs that speed up the closing process.
  • Closing costs can be rolled into the loan.

Opportunities Within Neighborhoods (OWN) programs offer low down payment options, flexible credit criteria and other attractive features to meet the needs of many low- and middle-income borrowers and those buying homes in low- and middle-income areas.

Keep in mind that insurance can reduce the immediate outlay of buying a home, but this flexibility does not come free. It carries an interest rate of 0.3% to 1.2% of your loan balance and is usually paid in monthly installments along with your payment.

In addition, on our website, we show all of you the ways to manage your Wells Fargo mortgage, convenient mortgage login process. If you’re excited, please visit website to read it.


Borrowers can qualify for an FHA loan with as little as 3.5% down and a score of 580. Homebuyers with scores ranging from 500 to 579 are still eligible for FHA with a 10% down payment.

A minimum FICO score of 500 is required to purchase a home. Borrowers with scores above 580 must put down 3.5%. The funds may be a gift from a family member, and a seller concession of up to 6% is permitted. If your score is less than 580, the new FHA changes require a 10% down payment.

Yes. The lenders, on the other hand, almost always pull all three of your credit reports and scores as part of the standard loan application process. If you apply with someone else, the lender will also pull all three of their credit reports and FICO scores.

In short, there are many bad credit mortgage lenders with low down payments. These 15 best bad credit mortgage lenders can help you buy, refinance, or invest. You’ll find the right lender with their low rates and friendly service. Search more on

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