Buying a home with bad credit (generally considered a FICO score between ) is possible through several government-backed and specialized programs. The primary strategy involves using loans with lower credit requirements and combining them with down payment assistance to offset higher interest rates. Primary Mortgage Programs for Bad Credit Loan Program Minimum Credit Score Down Payment Key Advantage FHA Loans 500–579 (10% down) / 580+ (3.5% down) 3.5% or 10% Most accessible for low scores. VA Loans None (Lenders often set 500-620) 0% For veterans; no mortgage insurance required. USDA Loans None (Lenders prefer 640+) 0% For rural areas; no money down for those who qualify. HomeReady® / Home Possible® 620–660 3% Conventional loans for low-to-moderate income. Regional & Specialized Assistance (California Examples)
If you are buying in California, several state-specific programs can bridge the gap for buyers with lower credit or limited savings: How to buy a house with bad credit | Rocket Mortgage bad credit programs to buy a house