No-FICO and Sub-500 FICO


Can a borrower get a mortgage with no FICO or sub-500 FICO credit score?

Borrowers with credit scores under 500 or no FICO score will not qualify for prime loan programs and will therefore have to explore non-conventional mortgages. A borrower with no FICO credit score has not engaged in the U.S. credit marketplace, e.g. they have no loan repayment history and don’t use credit cards. Credit scores range from 300 to 850, with 500 or less categorized as poor credit. Fortunately for these borrowers, 500 credit score home loans are available, from the right low credit mortgage lenders. The same applies for borrowers looking for a home equity loan with a credit score under 600.  

500 credit score mortgage lenders are typically hard money lenders. These type of lender underwrites in such a way that the credit score is a less important factor than for conventional lenders. Instead, put a higher significance on whether the borrower has “skin in the game,” meaning a significant down payment on a purchase or sufficient equity to support a refinance. This focus on the available equity in the property, instead of the borrower’s credit-worthiness, allows them to offer LTVs of 70 or less. Loan amounts typically range between $25,000 to $5,000,000, with some hard money lenders willing to go higher.

Non-QM mortgage lenders may also consider bad credit home loans or no FICO score home loans. The LTV offered will be 80% or lower, often falling closer to 65%. Non-QM loans for foreign borrowers who don’t have U.S. credit history can approach 80% LTV, however sub-500 scores will generally bring the LTV down to 65% – 75%.

What about sub-500 FICO or no credit check commercial mortgages?

If the borrowers is in search of a commercial property, low credit mortgage lenders may not even take FICO score into consideration. Instead, if the property’s cash-flow is sufficient to support the new loan and there is enough equity in the property, the commercial lender may underwrite the loan on stated terms.

An apartment building or senior living center that is well-positioned in the market may qualify for a mortgage loan, despite the owner having a credit score of 500 or lower.

No credit check hard money lenders will finance mortgages for borrowers with either low credit scores or no a credit score if there is sufficient equity in the property.

Are there construction loans for borrowers with no FICO score or a sub-500 score?

Yes, many lenders offer these loans. If your client’s property is a residence of one to four units, then use the Residential Lender Search. If the property is income producing or a multifamily property, then use the Commercial Lender Search.

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