home loans for credit scores under 600 explained and compared

Popular programs compared

If your score is below 600, you still have paths to a mortgage. The most common is FHA, which allows scores down to 500 with bigger down payments and mortgage insurance. VA has no official minimum, and some lenders accept sub‑600. USDA can consider lower scores with manual underwriting. Non‑QM and portfolio loans also exist, at higher costs.

How lenders evaluate

Lenders balance credit with income, debts, and loan‑to‑value. Strong compensating factors-steady employment, cash reserves, verified rent history, and a larger down payment-can offset blemishes. Expect tighter documentation and close scrutiny of your debt‑to‑income ratio.

Next steps

• Pull all three reports; dispute errors and fix misreporting.
• Target at least 10% down for FHA under 580.
• Ask lenders for manual underwriting if automated findings fail.
• Shop three quotes-broker, bank, and credit union.
• Get rate locks and lender credits in writing upfront.