If you are searching for a home, it helps to know that you can get a home loan with bad credit. Many mortgage lenders may not offer loans to those with bad credit but some lenders do. These loans are likely to have higher interest rates than other conventional loans. There can also be features that make the loan riskier.

 

Those with less than stellar credit can work with the Federal Housing Administration. The FHA will insure loans that lenders make to any riskier borrowers so these lenders can offer home loans with lower financing rates and better terms. These home loans also allow borrowers to qualify with a lower down payment. For homebuyers with scores between 500 and 579, you can get a mortgage guaranteed by the FHA with just a 10% down payment. If your score is 580 or higher, you only have to put down 3.5%. Those with bad credit should still shop around for a home loan to compare terms and rates.