In some places in the U.S., bad credit doesn’t have to be a deterrent to scoring a mortgage and buying a home. Researchers from realtor.com® analyzed metros to find where a less-than-perfect credit score—even those well under 650—can still land buyers a home.
To get a mortgage without top-notch credit, government loan programs may be key, researchers say. Such programs may be more available in some areas of the country than others. For example, the U.S. Department of Agriculture offers a no-money-down loan to borrowers with scores below 640 who plan to buy a home in a rural ZIP code. Federal Housing Administration loans allow borrowers with credit scores as low as 500 to qualify with a 10 percent down payment.
Realtor.com® calculated the share of mortgages in the largest 200 metros obtained with a 649 FICO score or lower between July 2017 and June 2018. (Note: The findings are limited to one metro per state for geographic diversity.) Realtor.com® found that in the following five cities, home buyers with poor credit may have the most luck scoring a mortgage:
1. Charleston, W. Va.
- Median home list price: $147,300
- Share of borrowers with a 649 FICO score or lower: 39.1 percent
- Median home list price: $209,950
- Share of borrowers with a 649 FICO score or lower: 35 percent
- Median home list price: $239,750
- Share of borrowers with a 649 FICO score or lower: 35 percent
- Median home list price: $229,500
- Share of borrowers with a 649 FICO score or lower: 30.4 percent
- Median home list price: $218,000
- Share of borrowers with a 649 FICO score or lower: 26.5 percent
- Median home list price: $936,050
- Share of borrowers with a 649 FICO score or lower: 4.3 percent
- Median home list price: $257,050
- Share of borrowers with a 649 FICO score or lower: 5.4 percent
- Median home list price: $350,000
- Share of borrowers with a 649 FICO score or lower: 6 percent
Source:
“Got Lousy Credit? 10 Places Where it Won’t Stop You From Buying a Home,” realtor.com® (Sept. 10, 2018)
