Buying a Home with a Low Credit Score: How to Qualify and What to Expect

Many hardworking Americans dream of owning a home but hesitate to start the process because of one thing — their credit score. Maybe you’ve missed a few payments, had high balances during tough times, or are still recovering from an unexpected financial setback. Whatever the reason, a low FICO score doesn’t have to close the door on homeownership.

At National Mortgage Home Loans, we work every day with clients whose credit isn’t perfect — and still help them find loan options that fit their goals. The truth is, your FICO score is only one piece of your financial picture, and there are many ways to build a strong loan profile even if that number isn’t where you’d like it to be.

Understanding Your FICO Score

Your FICO score is a three-digit number that typically ranges from 300 to 850. It reflects how you’ve managed credit over time and is based on five key factors: payment history, amounts owed, length of credit history, credit mix, and new credit. While a higher score generally makes it easier to qualify for favorable loan terms, a lower score doesn’t mean you’re out of options. In fact, many lenders — especially mortgage brokers like National Mortgage Home Loans — work with a variety of programs designed to help borrowers with credit challenges.

Loan Programs That Work with Lower Credit Scores

Not all mortgages are created equal. Some are backed by federal agencies, while others are more flexible “non-QM” products created for real-world borrowers who don’t fit the traditional mold.

FHA Loans
FHA loans are insured by the Federal Housing Administration and were specifically created to help first-time and moderate-income buyers. These loans often accept FICO scores as low as 580, and even 500 with a higher down payment. They allow for low down payments, flexible credit requirements, and the use of gift funds.

VA Loans
For veterans, active-duty service members, and eligible spouses, VA loans are among the most flexible mortgage options available. These loans are backed by the Department of Veterans Affairs and have no minimum credit score requirement set by the VA itself, though most lenders look for scores around 580 or higher. At National Mortgage Home Loans, we’re proud to have a VA Loan Specialist who has also served, bringing firsthand experience and deep understanding to every client interaction.

USDA Loans
If you’re looking to purchase in a qualifying rural area, a USDA loan could be another excellent option. These loans often require no down payment and accept lower credit scores, typically around 620 or above, depending on your full financial profile.

Non-QM (Non-Qualified Mortgage) Loans
For borrowers who don’t meet traditional documentation or credit standards — such as self-employed individuals, real estate investors, or those recovering from financial hardship — Non-QM loans can be a powerful solution. These loans can qualify borrowers using bank statements instead of tax returns, asset depletion (using savings or investments as income), or DSCR ratios for investment properties. Non-QM programs are especially valuable for those with lower credit scores, since they take into account your current financial strength, not just your credit history.

How National Mortgage Home Loans Helps Low-FICO Borrowers

Most big banks and retail lenders follow rigid underwriting guidelines that automatically disqualify lower-score borrowers. At National Mortgage Home Loans, our philosophy is different: we focus on building a path to approval, not looking for reasons to say no.

We analyze your full financial profile, not just your score. We offer access to diverse loan products from multiple wholesale lenders, allowing us to find the best fit for your unique situation. We help you strategize your next steps — whether that means applying now or making small adjustments to qualify for better rates soon. We communicate clearly and guide you every step of the way, so there are no surprises during the loan process. Even if you’ve been turned down before, we can often find alternative pathways to get you approved — or help you create a realistic plan to get there within a few months.

Steps to Improve Your Credit Before Applying

If your score is below 600, there are actionable ways to improve it quickly. Check your credit report for errors. Pay down revolving debt to reduce your utilization ratio. Avoid opening new accounts before applying for a mortgage. Make all payments on time, even minimum ones, to build consistency. Keep old accounts open, as length of credit history matters. Sometimes, just one or two small changes can raise your score enough to qualify for better rates — and our loan specialists can show you exactly which steps to prioritize.

A low FICO score shouldn’t stop you from achieving the dream of homeownership. The lending landscape today is more flexible than ever, with countless programs built for real-world borrowers — those who work hard, have stable income, and are ready to invest in their future.

At National Mortgage Home Loans, we understand that life happens — and credit challenges don’t define your financial worth. Our team specializes in helping buyers of all backgrounds find smart, sustainable loan options that make homeownership possible.

If you’ve been told “no” elsewhere, don’t give up. Let’s talk about how we can turn that into a “yes.”

Reach out today to learn more about our flexible programs for low FICO borrowers and take the first step toward owning your next home with confidence.