The home-buying process can be especially nerve-wracking if you're worried about having less-than-ideal credit. Luckily, some lenders will consider applicants with bad credit — or no credit at all.
CNBC Select rounded up the top lenders that consider applicants with credit scores lower than the typical 620 requirement. We evaluated each based on the types of loans offered, customer support, the required minimum down payment amount, and other factors (see our methodology below).
Keep in mind that while you may be approved for a mortgage with a lower credit score, you'll likely receive an interest rate on the higher end of the lender's rate range.
Best for flexible terms
Rocket Mortgage
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans, FHA loans, VA loans and jumbo loans
Terms
15- and 30-year conventional loans, 30-year VA and FHA loans, custom mortgages with fixed-rate terms from 8 to 29 years.
Credit needed
Typically requires a 620 credit score but will consider applicants with a 580 as long as other eligibility criteria are met.
Minimum down payment
3.5% if moving forward with an FHA loan
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Pros
- Largest home lender in the U.S.
- Offers 1% down conventional mortgage
- High scores for customer satisfaction
- Shorter-than-average closing time
- Rebate of up to $10,000 for buying with Rocket Homes
Cons
- No USDA mortgages, construction loans or HELOCs
- Hard credit check required for customized rate
- Higher origination fees than competition
- No retail branches
Who's this for? Rocket Mortgage stands out if you're seeking flexibility. While most lenders tend to require a minimum credit score of 620, Rocket Mortgage accepts applicants with credit scores as low as 580.
Standout benefits: Rocket Mortgage offers a free program called Fresh Start to help potential applicants boost their credit scores before applying. Its proprietary low down payment option, the ONE+ mortgage, allows borrowers to put as little as 1% down.
Best for veterans
Who's this for? Navy Federal Credit Union is ideal for current or retired members of the Armed Forces with a Navy Federal Credit Union membership (immediate family members are also eligible). While this lender doesn't disclose its required minimum credit score, it works with members to analyze their circumstances and find the right mortgage fit for them, making Navy Federal Credit Union a potentially more flexible lender if you have a lower credit score.
Standout benefits: You can use the RealtyPlus program to buy a home and receive up to $9,000 in cash back. Private mortgage insurance (PMI), is also not a requirement for a low down payment on a mortgage through this lender.
Best for no PMI
CitiMortgage®
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans, FHA loans, VA loans and Jumbo loans
Terms
15 – 30 years
Credit needed
580
Minimum down payment
3%
Terms apply.
Pros
- Citi's HomeRun Mortgage program allows for a downpayment as low as 3%
- Citi's Lender Assistance program gives eligible homebuyers a credit of up to $5,000 to use toward closing costs
- Ability to choose between fixed-rate and adjustable-rate mortgages
- New and existing Citi bank customers can qualify for closing cost discounts based on their account balance
- HomeRun mortgage program allows for a downpayment of less than 20% without PMI
- Provides homeownership education and counseling
Cons
- No options for a 0% downpayment
- Existing customers need high account balances to receive some of the highest interest rate discounts
Who's this for? CitiMortgage is great if you want to put less than 20% down but avoid the monthly PMI bill. If you apply for a mortgage through Citi's HomeRun program, you can make down payments as low as 3% without PMI. If you've already purchased your home, this program can also be used to refinance your mortgage.
Standout benefits: Existing Citi customers with an account balance between $1 and $49,999.99 can be eligible for a $500 closing credit. Those with higher balances can receive an interest rate discount. Qualified borrowers can use the Lender Paid Assistance program to get up to $7,500 in credits toward closing costs. Homeownership counseling and education are also available.
Best for no credit score requirement
Guild Mortgage
Annual Percentage Rate (APR)
Fixed-rate and adjustable-rate available, apply online for rates.
Types of loans
Conventional loans, construction loans, FHA loans, VA loans, USDA loans and Jumbo loans
Terms
15-year to 30-year
Credit needed
Some loans require a 620 credit score, some require a 540 credit score or no credit score at all.
Minimum down payment
0% if moving forward with a USDA loan; 0% if moving forward with an Arrive Home™ or Zero Down mortgage (a 3% to 5% down payment is financed through a second mortgage with these options) ; 1% on conventional loans for some qualifying borrowers
Pros
- Offers several low down payment mortgage options available
- Wide variety of loans
- Accepts applicants with credit as low as 540 or no credit at all with some loans
- Provides lots of information online about the homebuying process
- Robust brick-and-mortar and online presence
Cons
- Rates are not available to view on the website
- Mortgages may not be available for every home type
Who's this for? Guild Mortgage can provide options even if you don't have a credit score or have a score as low as 540 — a lower threshold than the typical 620 credit score lenders usually require to even look at an applicant. Instead, Guild uses proof of on-time payments such as rent checks, utility bills and insurance payments to verify an applicant's credit. It also boasts a variety of loans and down payment assistance programs if you want to make a small down payment.
Standout benefits: Guild Mortgage's Zero Down allows borrowers with a credit score of 600 or greater to take out an FHA loan with 0% down — the lender will provide an additional repayable loan to the borrower as a second mortgage to supplement the FHA's traditional 3.5% down payment requirement. Qualifying borrowers who make up to 160% of the area median income can also take out Guild Mortgage's Arrive Home™ loan, which allows borrowers to put 0% down by taking out a repayable second mortgage with the company.
Best for a quick closing
CrossCountry Mortgage
Annual Percentage Rate (APR)
Fixed-rate and adjustable-rate available, apply online for rates.
Types of loans
Conventional loans, FHA loans, VA loans, USDA loans, Jumbo loans, manufactured home loans
Terms
Apply online for terms
Credit needed
620 for conventional loans, 500 to 580 for some government-insured loans
Minimum down payment
3%
Pros
- Provides down payment grants
- FastTrack Credit Approval program allows some borrowers to close on mortgage within 10 days
- Website provides a variety of tools, including a mortgage calculator, homebuying guide, and refinancing guide
- Available in all 50 states
Cons
- Higher-than-average rates
- Rates are not online
Who's this for? CrossCountry Mortgage is great if you want a lender with faster-than-average closing times. It offers conventional loans, FHA loans, VA loans, USDA loans, Jumbo loans, manufactured home loans. While most of its conventional loans require a 620 credit score, some federally insured options accept borrowers with a credit score as low as 500.
Standout benefits: CrossCountry Mortgage offers down payment grants for qualified buyers. With its FastTrack Credit Approval, CrossCountry says its borrowers have an edge in the home buying process with a reapproval process that allows borrowers to get the funds in as little as 10 days.
More on our top lenders for those with bad credit
Rocket Mortgage
Rocket Mortgage — the largest home loan provider in the country — has a variety of loan options available — especially for those looking to make a small down payment. It accepts borrowers with credit scores as low as 580 and provides a large number of educational resources on its easy-to-use website. Rocket has consistently scored above average on customer satisfaction surveys.
Minimum credit score
580
Types of mortgage loans offered
Fixed-rate, adjustable-rate, FHA loans, VA loans, jumbo loans, HomeReady and Home Possible loans
Down payment minimum
1% with the ONE+; 3.5% with FHA loan
Navy Federal Credit Union
Navy Federal Credit Union is the largest provider of VA loans and provides many benefits to veterans, and their immediate families. With a VA loan, you have the option to pay 0% down and the seller can contribute up to 4% of the home's value toward closing costs. Navy Federal also offers the Military Choice mortgage, which has similar guidelines to the VA loan, such as no PMI and a 0% minimum down payment, but allows sellers to contribute up to 6% of the home's value toward closing costs.
Minimum credit score
Not disclosed.
Types of mortgage loans offered
Conventional loans, VA loans, Military Choice loans, Homebuyers Choice loans
Down payment minimum
0%; 5% with conventional loans
CitiMortgage
CitiMortgage allows homebuyers to make a small down payment without worrying about PMI. Citi offers qualifying existing customers closing cost aid or interest rate discounts.
Minimum credit score
580 if taking out an FHA loan.
Types of mortgage loans offered
Conventional loans, FHA loans, VA loans and jumbo loans
Down payment minimum
3%
Guild Mortgage
Guild Mortgage provides many loan types for borrowers with much lower credit than lenders usually require. In some cases, a credit score is not even needed. Guild also provides several low down payment options.
Minimum credit score
540 for some mortgages; no credit needed for some mortgages
Types of mortgage loans offered
Conventional loans, construction loans, FHA loans, VA loans, USDA loans and Jumbo loans
Down payment minimum
0% with a down payment assistance loan as a second mortgage.
CrossCountry Mortgage
CrossCountry Mortgage offers a wide variety of loans and says it can give its borrowers a leg up in the homebuying process through its FastTrack Credit Approval which allows borrowers to close on a loan in as little as 10 days.
Minimum credit score
580 or 500 for some government-insured loans.
Types of mortgage loans offered
Conventional loans, FHA loans, VA loans, USDA loans, Jumbo loans, manufactured home loans
Down payment minimum
3%
FAQs
What is pre-approval and how does it work?
Pre-approval is a statement or letter from a lender indicating how much money you qualify to borrow to purchase a home and your potential interest rate. You'll likely have to provide bank statements, pay stubs, tax forms and employment verification, among other requirements, and once pre-approved, you'll receive a mortgage pre-approval letter, which you can use to begin viewing homes and making offers. It's best to get pre-approved at the start of your homebuying journey before you start looking at homes.
How do mortgages work?
A mortgage is a loan you can use to purchase a home. It's also an agreement between you and the lender that essentially says you can purchase a home without paying for it in full and upfront — you'll just need to put some of the money down — usually between 3% and 20% of the home price — and pay smaller, fixed monthly payments over a certain number of years, plus interest.
How is my mortgage rate decided?
Mortgage rates change almost daily and can depend on market forces such as inflation and the overall economy. While the Federal Reserve doesn't set mortgage rates, they do tend to move in reaction to actions taken by the Federal Reserve on its interest rates.
While market forces may influence the general range of mortgage rates, your specific rate will depend on your location, credit report and credit score. The higher your credit score, the more likely you are to be qualified for a lower mortgage interest rate.
What is a conventional loan?
A conventional loan is a loan that's funded by private lenders and sold to government enterprises such as Fannie Mae and Freddie Mac. It's the most common type of loan and some lenders may require a down payment as low as 3% or 5%.
What is an FHA loan?
A Federal Housing Administration loan, or FHA loan, typically allows you to purchase a home with looser requirements — for example, you may get approved with a lower credit score or be able to get away with having a higher debt-to-income ratio. You'll typically only need to make a 3.5% down payment.
What is a USDA loan?
A USDA loan is offered through the United States Department of Agriculture and is aimed at individuals who want to purchase a home in a rural area. Best of all, USDA loans require a minimum down payment of 0% — in other words, you can use it to buy a rural home without a down payment.
What is a VA loan?
VA mortgage loans are provided through the U.S. Department of Veterans Affairs, meant for service members, veterans and their spouses and require a 0% down payment with no mortgage insurance.
What is a jumbo loan?
Borrowers who need a mortgage for more than $766,550 to purchase a single-family home (in most areas) will need to take out a jumbo loan. Note that these types of loans typically have stricter credit score and debt-to-income ratio requirements in part because they do not meet the Federal Housing Finance Agency's (FHFA) conforming guidelines.
What is the difference between a 15- and 30-year term?
A 15-year mortgage gives homeowners 15 years to pay it off in fixed, equal amounts plus interest, while a 30-year mortgage gives 30 years to pay it off. With a 30-year mortgage, your monthly payments will be lower since you'll have a longer period to pay off the loan, however, you'll wind up paying more in interest over the life of the loan since it is charged every month. A 15-year mortgage, on the other hand, lets you save on interest but you'll likely have to make a higher monthly payment.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of mortgage products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best bad credit mortgages.
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Our methodology
To determine which mortgage lenders are the best for bad credit, CNBC Select analyzed dozens of U.S. mortgages offered by online and brick-and-mortar banks, including large credit unions, that come with fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.
When narrowing down and ranking the best mortgages, we focused on the following features:
- Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan's term, which means your monthly payment won't vary, making your budget easier to plan.
- Types of loans offered: The most common kinds of mortgage loans include conventional loans, FHA loans and VA loans. In addition to these loans, lenders may also offer USDA loans and jumbo loans. Having more options available means the lender can cater to a wider range of applicant needs. We have also considered loans that would suit the needs of borrowers who plan to purchase their second home or a rental property.
- Closing timeline: The lenders on our list can offer closing timelines that vary from as promptly as two weeks after the home purchase agreement has been signed to as many as 45 days after the agreement has been signed. Specific closing timelines have been noted for each lender.
- Fees: Common fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining the overall offer from each lender. Though some lenders on this list do not charge these fees, we have noted any instances in which a particular lender does.
- Flexible minimum and maximum loan amounts/terms: Each mortgage lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
- No early payoff penalties: The mortgage lenders on our list do not charge borrowers for paying off the loan early.
- Streamlined application process: We considered whether lenders offered a convenient, fast online application process and/or an in-person procedure at local branches.
- Customer support: Every mortgage lender on our list provides customer service via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
- Minimum down payment: Although minimum down payment amounts depend on the type of loan a borrower applies for, we noted lenders that offer additional specialty loans that come with a lower minimum down payment amount.
Note that the rates and fee structures advertised for mortgages are subject to fluctuate per the Fed rate. However, once you accept your mortgage agreement, a fixed-rate APR will guarantee the interest rate and monthly payment remain consistent throughout the entire term of the loan, unless you choose to refinance your mortgage at a later date for a potentially lower APR. Your APR, monthly payment and loan amount depend on your credit history, creditworthiness, debt-to-income ratio and the desired loan term. To take out a mortgage, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.
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