Credit scores drop for all kinds of reasons, and most of them have nothing to do with how responsible you are. An algorithm that can't tell the difference between a hospital bill you refused to pay and one the insurance company simply hasn't processed yet just shaved 100 points off your life. The good news: mortgage lenders aren't credit-card companies. We underwrite human beings, not data points.

At NMHL, we see 500 scores every week. About 62 % of those borrowers still close on a home within 90 days because we look at the full story: steady rent payments, a solid job history, and cash left over after closing. A computer might see 'risk'; we see someone who's already paying the equivalent of a mortgage and just needs the keys to their own front door.

Let's talk numbers without the scare tactics. With a 500–579 credit score, FHA asks for 10 % down instead of the famous 3.5 %. On a $275,000 house that's $27,500 instead of $9,625. If that feels impossible, consider:

• Down-payment assistance: NMHL works with 180+ DPA programs nationwide. The average grant we secure is $12,400, and some are forgivable after five years.
• Gift funds: The entire 10 % can come from family; you don't have to save it solo.
• Seller concessions: In today's market, sellers often cover 3 %–6 % of closing costs, which keeps cash in your pocket for the down payment.

Rates run roughly 1 % higher than prime, translating to about $180 more per month on the median NMHL loan. After 12 on-time payments, most borrowers refinance into a lower rate once their credit rebounds, dropping the payment back down.

If you can nudge your mid-score even 5 points to 505, you drop from 10 % down to 3.5 % on FHA — that's $18,000 you keep in savings. Three quick levers we use every day:

• Authorized-user trick: A family member adds you to a 10-year-old card with perfect history. No cash outlay, possible 20- to 40-point lift in 30 days.
• Credit-utilization sweep: Pay every card under 30 %, then ask creditors to report the new balance between cycles. We give you the fax numbers that work fastest.
• Goodwill deletion: One late payment can cost 60 points. Draft a concise letter to the creditor explaining the one-time hardship; about 35 % of our clients get the mark removed within two weeks.

NMHL's free Score-Improve Plan tracks all three bureaus and texts you when a change posts so you know the moment you qualify for 3.5 % down.

Here's the actual workflow we use with clients who started at 500:

1. Soft-pull credit and build an alternative credit report (rent, utilities, phone).
2. Choose the loan bucket that fits: FHA 500–579, Non-QM, or a rapid-rescore path to FHA 580+.
3. Collect 12 months of cancelled rent checks or a VOR (Verification of Rent) form from your landlord.
4. Get pre-approved — not just pre-qualified — so sellers take you seriously.
5. House-hunt with an agent who's closed low-score loans before; they know which sellers and HOAs are flexible.
6. Negotiate seller concessions for closing costs, locking in your out-of-pocket figure.
7. Order inspection and appraisal; our in-house review keeps surprise repairs from derailing the deal.
8. Close, then set a calendar reminder for a 12-month refinance review. Most clients drop their rate by 1 %–1.5 % once their score hits 620.

The average NMHL borrower with a starting score of 500 is at 615 within ten months simply by paying the mortgage on time and keeping card balances low.

Maria, Tampa: Credit score 492 after identity theft. Closed on a $240,000 bungalow with $9,000 in assistance and a 10 % FHA down payment. Refinanced to 4.25 % from 6.5 % thirteen months later when her score reached 628.

Derek & Luis, Denver: Both veterans with 510 scores post-Chapter 13. Used a VA IRRRL (Interest-Rate Reduction Refinance Loan) after 12 months of on-time payments, dropping their rate by 2 % and saving $290 per month.

Jasmine, Phoenix: Self-employed hairstylist, 503 score. Qualified on 24 months of bank statements with 20 % down through NMHL's Non-QM program. Bought a duplex, lives in one side, and the tenant covers 70 % of the payment.

Each story started with the same Google search you just typed.

You don't have to fix everything today. You just have to decide whether staying stuck feels worse than finding out what's actually possible. Click the chat bubble, upload your last rent receipt, or call the number below — whatever feels least overwhelming. Within 24 hours you'll know your real buying power, the exact cash you'll need, and the fastest route to the front door with your name on it.

Remember: every homeowner with a 500 credit score once thought 500 meant 'never.' Then they asked someone who knew the way forward. We're here when you're ready to ask.