No Credit Score FHA Loans?

It can be frustrating for some homebuyers when they can’t get their FHA loan approved. Many times it is because they don’t have enough credit history on record to meet requirements. Take for example a first-time homebuyer who  has poor credit score, and continues to be rejected on their home mortgage application. They are not poor at money management – they just haven’t had enough time to prove it to the banks and loan officers.

Fortunately, there are some ways you can get an FHA loan without a need to look at your no credit score. Many mortgage lenders are typically willing to accept a shorter credit history or none at all if you are able to pay your mortgage payments and upfront costs and can demonstrate that fact.  There are some specific requirements you will have to meet. Let’s take a look.

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Requirements For Eligibility Of No Credit Score FHA Loans

While you might be able to get around having a credit score, mortgage companies still require proof that you can pay your monthly payments on time. They are taking the time risks, and efforts to back your dreams and they can recoup their investment with you as well. Trust is an absolutely necessary part of the loan process for both parties.

You will have to show a record of finances and such documents as these:

  • Stable job, letter of employment, pay stubs
  • Steady income reported by tax returns
  • Investment funds for the upfront payments and closing costs
  • Reserve funds in case of emergency
  • Bank statements documenting your assets

Instead of a traditional credit report, mortgage specialists might consider other obligations that normally don’t appear in your credit history. You might demonstrate you’re a capable borrower via utility payments, on-time rent, mobile phone, or online payments.

FHA Loans For No Traditional Credit:

Building a good credit score takes time. There is no way around the hard work. Yet, if you’re been looking forward to purchasing a home, waiting until you have good credit can feel slow and disappointing. When real estate moves so fast you can see houses come and go. However there is a solution.

When you have practically no credit, the FHA mortgage can be a good option.

The FHA cannot reject your application just because you don’t have a credit history. In this way it provides an advantage to those without credit (namely first time home buyers) rather than dismissing them based on no credit history.  The FHA instructs its officers to check all aspects of a loan application for eligibility – giving you greater chance at successfully obtaining a loan. This is great for first-time homebuyers since FHA allows a minimum down payment of just 3.5% when compared to conventional options between 10-20% down.

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Who Provide Loans To No Credit Score Individuals?

You will find that many mortgage companies will accept your application without any credit history. While they prefer to work with more qualified lenders, doing some research into local mortgage companies often reveals several who specialize in FHA Loans and no credit areas.

Credit unions, local banks, and specialized lenders can be more flexible than other big companies. Or you can find a mortgage broker who has experience with FHA no credit loans. These lending experts work with various companies and approach a wide range of mortgage products. They’ll know which loan company offers the right programs and consider applications with no credit score. They can also assist you with finding the best interest rates by assessing your financial condition and developing a road map to get you approved.