How does a person with bad credit and no down payment get to buy a home?

I have low credit and my boyfriend has good credit. How do we go about getting a loan? We have never owned a home and do not have money for a down payment, or at least not the amount of what they usually ask for. We are so tired of throwing our money away in rent.... is there any hope for us?


We live in Kentucky.

12 Answers

  • 1 decade ago
    Best Answer

    I am a Realtor in KY and have helped many buyers with no down payment buy houses. There are two ways i suggest going about this. One way is by taking advantage of a loop hole in the FHA rules. FHA requires a 3 % downpayment and says the seller can't pay the down payment for you. The loophole is that FHA rules doesn't say a third party can't pay it for you. So, there are all these non-profit organizations that exist for this loophole and we simply write a contract telling the seller to pay the downpayment, plus a service fee, to the non-profit and pay the rest of the closing costs on your behalf. The non-profit gives you the the down payment and keeps the service fee. You give the downpayment to the seller. Done deal. I have done dozens like this.

    The second way is by utilizing a state program that is available to lower income people/families that offers a minimum of $5,000. The moeny is actually assigned as a small second mortgage, but you never have to pay a dime on it and it is completely foregiven 20% per year over five years.

    If your boyfriend makes the majority of the money, you might be good to go today, but ultimately I suggest you speak to a mortgage broker first to see what your options are. You may have to take some time for credit repair, and if you live in Jefferson county there are specific programs available for that repair. email me if you have any other questions

    Source(s): I am a Realtor
  • Anonymous
    4 years ago

    There are banks/lenders that will give a home loan to people with bad credit but they do so at an extremely higher interest rate so you end up owing alot more in the long run. Best to get your credit score improved by not using more, paying what you can on what is owed and if needed cutting up cards that are with the highest interest in the borrowing to begin with. Your credit score needs to be raised. This can be done by not spending further and making above the minimum payment and not making late or missed payments on what is already owed. Overall, now is not a great time to buy a home. The banks are merciless in late payments on this and foreclosures are on the rise. The market is bad though for sellers right now and if one wants to take on the house payments there are sellers that are looking for a fast sale. Check the papers locally and see the for sale by owners, no money down and rarely there are ads listing even if you have bad credit. Regardless of what you decide, be SURE to get a home inspection before any purchase to avoid having any major unexpected expense once you purchase a home. Some things can be required to be fixed by the current owner prior to a purchase even then. A home inspector shouldn't cost that much but make sure they are reputible. Good luck.

  • 3 years ago


    Source(s): Rent To Own Houses :
  • Anonymous
    1 decade ago

    Don't lose hope if you're looking to buy a home. There are so many different ways to fund a home now, just about anyone with any kind of credit can get into a home, regardless of credit situation.

    Of course, some will cost you more money in the long run, but a home it's still one of the best investments that you can make, so, in many cases, it's worth it, especially for the first year of ownership.

    You should shop around, and ask different lenders what kind of programs they have, and if they can help. Try to find a lender that specializes in bad credit mortgages. You can find some bad credit mortgage lenders listed on this page on and off:

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  • 1 decade ago

    inquire about a first time home buyers loan and grant. It is possible i did it when i was 19, i had bad credit and my girlfriend had good credit. You can get it to were the seller pays the closing cost and there will be no down payment on your part. The best thing to do is consult the real estate agent for the home you are wanting.

  • 1 decade ago

    your best bet is to look at an F.H.A loan, as well as a gift program( to cover what you need to put down, also since the BF has the good credit, he should be the only one on the loan, it will make things easier as long as his debt to income ratios are under 35/45, you should be OK,

    The Mortgage insurance Or M.I. is a better option than Private Mortgage Insurance. and M.I. Is not a substitute for a down payment, Its Just what it says it is, Mortgage Insurance,

    the F.H.A allow you to have a 97% Loan to value or l.t.v,

    that being the case the company ameridream allows the sellers to contribute up to 6% of the purchase price to down payment and closing costs,

    Source(s): 7 years of lending, credit, and mortgage
  • 1 decade ago

    If your boyfriend has good credit and could afford it alone you could have him apply for the loan, if the both of your are first time buyers you should look into first time buyer loans, search the internet, call a few real estate agents in your area, but i would search the net first for your area, ask someone who has already bought a house if they recommend a real estate agent. Your best bet will be if you are both first time buyers. Not sure what state you are in so this is kind of vague but start looking in to state loans and so on

  • Anonymous
    1 decade ago

    Will you be buying within your means? Down payments are necessarily required, they only help the buy lower there payments. If you bf's credit is good, then all you have to do is go to a bank/lender and see if you qualify for a loan, they can advise you further what you qualify to borrow, and what other options you have.

  • 1 decade ago

    Yes! Get in touch with the FHA (Federal Housing Administration). They have programs for first time buyers, like yourself, that require little to no down payment. The catch is that you are paying what's called "mortgage insurance," but it works out to a small addition to your monthly payment and isn't usually a lump sum like a big down payment would be. They should be able to recommend a lender in your area that works with FHA loans.

    Source(s): Licensed Real Estate Agent
  • Anonymous
    1 decade ago

    There are hundreds if not thousands of websites on the internet enumerating the ways to apply and receive home loan when you are plagued with bad credit issues. These sites help consumers with bad credit scores to increase the viability of their existing credit scores and set up loans regardless of their credit history.Companies that specialize in bad credit home loans; usually offer a wide range of options for consumers with bad credit<!--These options include Bad Credit Home Loans, Home Equity and Line of Credit (HELOC) Loans and different options for Mortgage Refinancing, making it possible for those with bad credit to realize the dream of owning their own home.You can find more information on Home Loans here,

    They also offer a debt consolidation offer which helps the home owner organize a comprehensive program for controlling their spending. Many consumers with bad credit are grateful for the opportunity to receive a second chance, sort to speak-->Bad credit hasn't stopped them from purchasing a home. There are several programs available for people with bad credit that helps to restore their credit status and to live debt free lives.

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