With a 450 350-399 credit score, your only option for a mortgage is through private money investors, aka hard money lenders. Other types of loans are entirely off limits regardless of your income, cash in the bank, or low LTV. You will need to raise your credit score to at least 500 and preferably 580 to become eligible to obtain a HUD FHA loan, or a subprime loan.
To find out the requirements for an FHA loan, explore https://www.hud.gov/program_offices/housing or enter your data here into our FHA loan eligibility calculator and alternative options.
Despite having a poor credit score of 350-399, private investors through hard money brokers will lend you money to purchase a new property or refinance the existing property as long as you have a large down payment or enough equity in the property.
| Owner-Occupied Residential Hard Money | Owner-Occupied Residential | Commercial | Vacant Land | Conventional FHA, VA, USDA, Non-Qm | |
|---|---|---|---|---|---|
| Max Loan to Value | 59.91% | 60.01% | 61.02% | 50.02% | N/A |
| Programs | Hard Money | Hard Money | Hard Money | Hard Money | N/A |
| Vesting | Natural, Corporation, LLC | Natural, Corporation, LLC | Natural, Corporation, LLC | Natural, Corporation, LLC | N/A |
| Tax Returns | Bank statements or other documents showing ATR | Alt documents or equity-only loans | Alt documents or equity-only loans | Alt documents or equity-only loans | N/A |
| Points | 3.22 | 3.95 | 3.7 | 4.01 | N/A |
| Rate | 11.45% | 12.34% | 11.85% | 13.54% | N/A |
| Loan terms | 1—5 years | 1—5 years | 1-7 years | 1-3 years | N/A |
| Property Condition | Any | Any include Fixer-Upper | Any | Unentitled land- reduce LTV to 26.23 | N/A |
The Rates & Terms depend on the Loan-to-Value, credit, property location, condition, and local real estate market condition. Unlike the FHA loan, which has standard underwriting, private money loan programs differ significantly between lenders. It behooves you to contact and get quotes from at least three lenders before you make a decision. See a list of potential hard money lenders or use the Lendersa form to shop for your loan simultaneously with hundreds of private money lenders.
350-399 is a low score; unfortunately, a small percentage of mortgage brokers could take advantage of your credit disadvantage by trying to charge you an arm and a leg. Therefore, it would be best if you compared 3-10 lenders' programs before deciding on the best lender, thus avoiding mortgage brokers' rip-offs and loan sharks.
Credit scores of 625 or above will open the door for more loan programs and better rates & terms. If you are not rushing to refinance or purchase a property, consider raising your credit score before attempting a loan review. Check our recommended resources to improve your credit at the bottom of the page Improving your credit score will enhance your chances for better loans. Understanding how credit scores work is the first step to raising your credit.
Here are a few links to resources that could raise your credit score: https://www.usa.gov/credit-reports https://www.fanniemae.com/crediteducation https://myhome.freddiemac.com/refinancing
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