Yes, you can buy a house with a 540 credit score, though your options are more limited than higher scores. Non-QM loans and Bank Statement loans are your primary paths. You will need a larger down payment (15-20%) and should expect higher interest rates. An NMHL loan officer can review your complete financial picture to find the best available option.

You are just 40 points away from the standard FHA threshold of 580, which unlocks 3.5% down payment options. With consistent on-time payments and credit card balance reduction, many borrowers can achieve a 40-point increase in 3-6 months. Some FHA lenders may consider scores between 540-579 with a 10% down payment, but availability is limited.

Most lenders require 15-20% down for borrowers with a 540 credit score. On a $300,000 home, that means $45,000-$60,000 in down payment funds. Some Non-QM lenders may accept lower down payments with strong compensating factors like high income, large cash reserves, or low overall debt levels.

Yes, expect rates in the 7.5-9% range compared to 4.5-5.5% for borrowers with excellent credit. On a $250,000 loan, this difference means roughly $500-$700 more per month. However, you can refinance to a lower rate once your credit improves, making homeownership achievable now while still planning for better terms in the future.