If you need 100% financing for your new home and have a low low credit score you do still have a number of options availible to you. The first option would be an FHA loan. Although FHA only lend to 97% of the property value there are down payment assistance programs that can assist you with a down payment. FHA is still considered the best choice for 100% financing with a low credit score.If you have a substantial amount of assets, you will have a better chance getting financed at 100% with a lower credit score.
Other government back programs like "My Community" can help home buyers purchase homes from 97% to 100% Financing. They have fairly relaxed underwriting guidelines when it comes to credit and income sources.
If you are a Veteran, you may qualify for a VA loan at 100% financing with a lower credit score. Active Duty, Reservists, and National Guardsmen can qualify for a VA Certificate of Eligibility. The Certificate of Eligibility alone will not qualify you for a loan necessarily, but it will allow you for consideration for a VA Loan.
Several programs still exist to obtain 100% financing even with a low credit score. Contact a mortgage broker to determine if you qualify for these loans.
Other programs such as the 100% Flex program also allow for 100% financing with a low credit score. Compensating factors, such as money in the bank, low debt to income ratios and good job time will help to improve your chance of being approved for 100% financing with a low credit score as well.
The Freddie Mac counterpart to Fannie Mae My Community Mortgage is also known as Freddie Home Possible. This program offers up to 100% financing for low credit score borrowers.
