6 Best Lenders for Bad Credit Home Loans

You can get a mortgage even if your credit is less than perfect.

Getting a mortgage with bad credit can be difficult, but bad credit mortgage loans do exist, and some even have favorable terms and APRs. Traditionally, home loans for bad credit borrowers fell to the risky subprime mortgage sector. But today there are several options — including FHA home loan programs — for borrowers who want to know how to get a home loan with bad credit.

If you want to know how to get a mortgage with bad credit, these are the lenders to contact first. Hopefully, you’ll find it’s not as difficult as you thought to buy a house with bad credit.

Best Lenders for Bad Credit Home Loans
LenderLoans for Consumers With Bad Credit RatesTermsRequirements
DitechDitech Home LoansFHA Loan — down payment as low as 3.5%, one of easier home loans to qualify4.125%30 years, fixedAllowance for less-than-perfect credit
PrimaryResidentialPrimary Residential Mortgage Inc.FHA Choice Loan — down payment of 3.5% of final loan amountVaries30 years, fixedMin. credit score of 500
Bank of AmericaBank of AmericaAffordable Loan Solution Mortgage — down payment as low as 3%; FHA/VA Loans3.00%-3.750%15 or 30 years fixedNot listed
LendingTreeLending TreeFHA Loan — down payment of 3.5%Varies15- or 30-year fixedMin. credit score of 580
QuickenLoansQuicken LoansFHA Loan — down payment as little as 3.5%3.125%-3.75%15-, 20-, 25- or 30-year fixedMin. credit score of 580
 Wells FargoWells FargoFHA Loan — down payment as low as 3.5%VariesNot listedNot listed
Rates accurate as of June 6, 2017

Lenders for Bad Credit Mortgages

Just because your credit is less than perfect doesn’t mean you can’t obtain a mortgage loan. Even with poor or bad credit or a low credit score, you can still pursue the dream of being a homeowner with an affordable mortgage. FHA home loans are a good option for those with bad credit, for three reasons: their down payment requirements are low, closing costs are low, borrowers can qualify more easily because the minimum required credit score is only 500. Consider these six lenders for FHA home loans and bad credit mortgage loans.

Ditech Home Loans

Credit score requirement: Allowance for less-than-perfect credit

Ditech could be considered one of the best mortgage lenders for poor credit. The lender offers a housing loan backed and insured by the FHA. FHA home loans are a good option if you’re wondering how to buy a home with bad credit because they typically require as little as 3.5 percent down and make allowances for borrowers with poor credit. The current rate for a 30-year fixed mortgage is 4.125 percent, and you’ll need to get mortgage insurance.

You can generally borrow up to $729,750 for buying a home with this loan, although the limit might vary depending on your state and county. Ditech offers FHA refinancing options, which also allow for credit history deficiencies.

Primary Residential Mortgage Inc.

Credit score requirement: 500 minimum

The FHA Choice Loan from Primary Residential Mortgage Inc. enables you to put as little as 3.5 percent down for a 30-year fixed loan. The company claims it’s one of the best mortgage lenders for borrowers with low credit scores, and it prides itself on securing bad credit home loans for customers who have been turned down elsewhere.

Primary Residential Inc. allows you to use compensating factors to counter negative information on your credit report, making it a good option if you’re buying a house and have bad credit. Rates vary, but you’ll need to obtain mortgage insurance.

Related: 6 Things You Need to Know About PMI

Bank of America

Credit score requirement: Not listed

Bank of America is another of the best mortgage lenders for bad credit. The bank’s Affordable Loan Solution program is designed for low- to moderate-income borrowers who can’t afford a large down payment. Maximum income requirements and loan limits apply, but no mortgage insurance is required and you can put as little as 3 percent down for a 30-year, fixed-rate mortgage.

The current rate is 3.923% APR and Preferred Rewards customers might qualify for a $200 to $600 reduction on their loan origination fees. First-time homebuyers might be required to take an education course from a HUD-approved provider or through Connect to Own, Bank of America’s nationwide network of counselors.

Learn: How to Get an FHA Loan in 5 Easy Steps


Credit score requirement: 580 minimum

Another answer for how to buy a house with bad credit, LendingTree offers FHA-backed loans for as little as 3.5 percent down. In addition, the down payment doesn’t have to be your own money — you can use borrowed or gifted money.

Lending Tree offers 15- and 30-year fixed mortgages at interest rates of 2.750 percent and 3.250 percent, respectively. Although you’re required to have a 580 credit score to get this loan, if your score is between 500 and 579, you can qualify with 10 percent down.

Quicken Loans

Credit score requirement: 580 minimum

Quicken Loans offers 15-, 20-, 25- and 30-year, fixed-rate loans for home loan borrowers to finance their primary residences. Its FHA loan requires as little as 3.5 percent down, and rates for a non-VA fixed rate home loan runs between 3.125 percent and 3.75 percent, depending on its terms.

Your rate depends on your credit score, type of loan, loan amount and down payment. These factors give the lender an idea of how much risk it’s taking in approving a bad credit mortgage.

See: 15 Surprising Ways Your Mortgage Could Be Rejected

Wells Fargo

Credit score requirement: Not listed

Wells Fargo offers low-credit borrowers and those with small down payments several loan options. You can get a traditional, fixed-rate mortgage with as little as 3 percent down.

With a Wells Fargo home loan, you are required to carry private mortgage insurance, but you can qualify with a co-applicant. The bank also offers FHA and VA loans as well as loans through its Easy-to-Own Guaranteed Rural Housing Program, all of which are backed by the government.

Next: 7 Tips to Refinance a Mortgage With Bad Credit