Can You Get a Mortgage with a 520 Credit Score?

Many prospective home buyers assume that your credit must be in the 600’s or 700’s to get a mortgage.  This is certainly not the case, as many mortgage lenders will provide home loans to borrowers with credit scores as low as 500. If you have a 520 credit score, the following loan options may be available to you.

FHA Loans for 520 Credit Score

The most common type of loan available to borrowers with a 520 credit score is an FHA loan.  Keep in mind, that in order to qualify for a 3.5% down payment, you must have at least a 580 credit score. For borrowers with a credit score between 500-579, you may still qualify for an FHA loan, but will be required to put 10% down. Below are the best FHA lenders for the 500-579 credit score range:

1.) Northstar Funding

2.) Carrington Mortgage Services

3.) Angel Oak Mortgage Solutions

The above FHA lenders are the top 3 choices for borrowers with a 520 credit score (or anyone in the 500-579 credit range). If you would like some assistance finding an FHA lender that may be able to help you, we can match you with the best FHA lender for your unique situation.

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Non-QM Loans for 520 Credit Score

In addition to FHA loans, there are also what are known as non-qm loans (non-qualified mortgages). These are loan products that are offered by alternative mortgage lenders that provide financing to borrowers with bad credit, and other unique situations. These lenders provide home loans to borrowers with credit scores as low as 500. You can learn more about some of these lenders below.

1.) Citadel Servicing

2.) Athas Capital

3.) Prime Equity Mortgage

Would you like some assistance being connected with a mortgage lender that may be able to help you? We provide a lender matching service, and can help connect you with the best mortgage lender for your unique situation.

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Frequently Asked Questions

Can I get a conventional loan with a 520 credit score?

No, the minimum credit score required for a conventional loan is a 620.  

Can I get a USDA loan with a 520 credit score?

No, the minimum credit score required for an automated approval for USDA loan is a 640.  Sometimes credit scores below a 640 are approved, but you would need at least a 580 credit score.

Can I get a VA loan with a 520 credit score?

Yes, if you are eligible for a VA loan, you may be able to qualify with a 520 credit score.

Can I get a jumbo loan with a 520 credit score?

Technically, you can get a jumbo loan with a credit score as low as 500, but would need to put at least 25% down.  Most jumbo mortgage lenders want to see a borrower have a credit score above 680, but some will approve a borrower with a credit score in the 500s.

What if I have had a major credit issue in recent years?

If you have had a bankruptcy, foreclosure, or short sale, there are several non-prime lenders that offer options even just 1 day out of your credit event. Expect to be required to put a much higher down payment down if you are within 2 years of most major credit events, such as those listed above.

Are there other credit requirements that I should know about?

Most mortgage lenders require that you have 3 trade-lines on your credit report. This can be auto loans, credit cards, personal loans, or other qualifying lines of credit. There can be exceptions to this rule, including non-traditional sources of credit, such as phone bills, utilities, gym memberships, etc.

What are the interest rates for a borrower with a 520 credit score?

The interest rate will depend on your individual qualifications, the mortgage lender, and the date you lock your interest rate. We can help you compare interest rates from mortgage lenders.

Is down payment assistance available to someone with a low credit score?

Yes, in fact many down payment assistance programs are available to people with very low credit scores. The types of programs range from local (city, county, or state level), or nationwide programs. We can help you see if you qualify for down payment assistance. If you have lower income, you are even more likely to qualify, as most programs are geared for lower income households.