You may not qualify for a conventional mortgage. But you may be able to get a loan through the Federal Housing Administration (FHA) if you are a first-time buyer and meet its other requirements.
People with credit scores as low as 580 are eligible for FHA loans. If your score is even lower, at 500, you may still be able to get a loan if you can make a 10% down payment. The FHA doesn’t issue these loans directly. Regular banks and lenders do. But the FHA backs them. This means that in the event you default, the government has your lender’s back. This is why lenders feel safe loosening up credit and income requirements for these loans.
Don’t even have a credit score? Believe it or not, you can still secure a mortgage if you can show that you have had non-conventional forms of credit and paid off all your debt. In this case, some lenders may agree to put you through a process called manual underwriting. If they do, getting approved for a mortgage may take a bit longer.