The number one option is subprime loans. However, this option is not advantageous for a borrower, and it is also extremely risky. So besides this most common path, you can also rely on the Federal Housing Administration for help. This organization works as an insurance company to provide an additional guarantee to a lender that a risky borrower (the one with bad credit) will repay the loan. With such insurance, you will be able to receive lower rates and overall better terms.
For example, FHA loans give borrowers with the credit score of 580 and higher (which is an impossible rate for a standard mortgage) the possibility to get 3.5% interest provided that you make a down payment. If your credit score is 500-579, then you still can get FHA support, but your down payment must make up for at least 10% of the total property cost.
One more option of bad credit mortgages is available for veterans, current service members as well as surviving spouses of service members. These people can qualify for a mortgage with the Department of Veterans’ Affairs. Countrymen from the rural areas with a low- to moderate-income might be eligible for a loan through the U.S. Department of Agriculture. In addition, there are local state or city programs that may facilitate home ownership to the local dwellers. But these regulations vary drastically from state to state; so if you would like to learn about the possibilities in your state, contact local Mortgage Agency to learn the specifics.