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Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he spent more than 20 years writing about real estate, business, the economy and politics.
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If your credit needs work, that doesn’t necessarily mean you won’t qualify for a mortgage. There are lenders and loan programs for borrowers with bad credit, including FHA loans. However, you’ll have your work cut out for you: During the third quarter of 2025, less than 4% of borrowers who took out loans had credit scores below 620, according to the Federal Reserve Bank of New York. Here’s our guide to the best mortgage lenders for bad credit in 2025.
This lender scored a perfect 5 out of 5 for affordability — Morty offers competitive mortgage rates and low down payment options. Morty also earned a perfect 5 for availability for offering a large array of loan options and being available in 45 states, plus Washington, D.C.
Morty is not a direct lender — rather, it is an online mortgage broker that connects borrowers with more than 25 lender partners.
Availability: All U.S. states except Connecticut, Hawaii, Massachusetts, Missouri and Nevada
Loans offered: Conventional, jumbo, FHA, VA, USDA, non-qualifying mortgages (non-QM), refinance loans and more
Credit requirements: 580 for conventional loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans, none for USDA loans
Where to find: Online only, no branch locations.
Pros
Offers preapprovals in minutes
Has an interactive rate quote tool and a closing tracker
Better scored perfectly on affordability and availability. It offers attractive interest rates that closely track with Bankrate’s national averages. In addition, this lender offers low- and no-down payment loan options and several types of mortgages to eligible borrowers across the country.
Availability: All U.S. states and Washington, D.C.
Loans offered: Conventional, FHA, VA, refinancing and more
Credit requirements: 620 for conventional loans, 580 for FHA loans, 620 for VA loans
Down payment minimum: 5% for conventional loans, 3.5% for FHA loans, none for VA loans
Where to find: Online only, no branch locations
Pros
Mostly online, with real-time online rates, three-minute preapprovals and hybrid closing
One Day Mortgage with approval in 24 hours for eligible borrowers
Price Guarantee matches or beats competitor offers
Cons
Limited branch locations
No USDA loans
Some Better Mortgage reviews cite poor customer service
You must be a member to borrow from FourLeaf, the largest credit union in New York state. But membership is easy to obtain — it simply requires opening a $5 savings account. This lender scored a perfect 5 out of 5 for availability for offering loans across most of the country and the ability to apply online or in person.
Availability: Available in all U.S. states except Texas
Loans offered: Conventional, FHA, VA, jumbo, refinancing and more
Credit requirements: 580 for conventional loans, 500 for FHA loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans
Where to find: Online and branch locations
Pros
Displays daily rates online
Rates tend to be lower than the national average
Offers HELOCs
Cons
Must be a member to get a mortgage (though this can be done by opening a $5 savings account)
PNC scored a perfect 5 out of 5 for affordability. Its rates and APRs are below market average, and the bank offers VA and USDA loans with no down payment. The lender also scored a perfect 5 in availability, thanks to its significant variety of loan options, which are available to qualified borrowers across the U.S.
Availability: All U.S. states
Loans offered: Conventional, jumbo, FHA, VA, USDA, refinancing and more
Credit requirements: 620 for conventional loans, 620 for jumbo loans, 600 for FHA loans, 640 for USDA loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans or USDA loans
Where to find: Online and branch locations
Pros
Online and in-person options to apply
Applications can be tracked online
Wide availability with many loan options
Cons
Higher credit minimum on FHA loans
Limited mobile app functionality
Below-average J.D. Power score for mortgage origination
Sage scored a 5 out of 5 in both affordability and availability. Its mortgage rates are below market average and the lender also provides a variety of low-down payment loan options to qualified borrowers. In addition, Sage Home Loans works with borrowers in every state except New York.
Availability: All U.S. states except New York
Loans offered: Conventional, jumbo, FHA, VA, refinancing
Credit requirements: 620 for conventional loans, 580 for FHA loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans
Where to find: Online only
Pros
Dedicated loan officer works with borrowers throughout the process
With its low APRs, low down payment requirements and minimal fees, Tomo earned a perfect 5 out of 5 stars for affordability. This lender also earned a 5 out of 5 for availability thanks to its variety of loan offerings and being available in over half of the U.S.
Availability: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, Wisconsin and Wyoming
Loans offered: Conventional, jumbo, FHA, VA and more
Credit requirements: 580 for conventional loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans
Where to find: Online only, no branch locations
Pros
No origination or processing fees
Mortgage rates available online
Offers a rate-lock option and a price-match guarantee
With widespread availability and a diverse portfolio of home loan products, LowRates.com earned a perfect 5 out of 5 stars for availability. This lender also scored well on affordability, a 4.9, thanks to its below-average APRs, low down payment requirements, competitive mortgage rates and participation in Housing Finance Agency (HFA) programs.
Availability: All U.S. states
Loans offered: Conventional, jumbo, FHA, VA, refinancing and more
Credit requirements: 620 for conventional loans, 700 for jumbo loans, 580 for FHA loans, 500 for VA loans
Down payment minimum: 3% for conventional, 3.5% for FHA loans, none for VA loans
Where to find: Online or visit Sun West branch locations, its parent company
Pros
Has a 24-hour loan center to provide fast loan approvals
Closings in as few as 20 days
Down payment assistance available
Cons
Sun West Mortgage branch locations only available in some states
Does not offer USDA loans, but they are available though Sun West
A large mortgage lender and servicer founded headquartered in California, Pennymac scored a perfect 5 out of 5 in availability. This lender works with borrowers nationwide on a wide range of loans, including options for those with lower credit scores.
Availability: All U.S. states
Loans offered: Conventional, jumbo, FHA, VA, USDA, refinancing and more
Credit requirements: 620 for conventional loans, 580 for FHA loans, 620 for VA loans
Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans and USDA loans
Where to find: Online only
Pros
Large lender with national presence
$1,000 off closing costs if preapproved (not applicable to jumbo loans or refinancing) and a rate reduction of 1% for 12 months
$2,000 if you purchase your home with Pennymac and refinance within three years
With its low APRs, low down payment mortgage options and its participation in affordable housing programs, SoFi earned a 5 out of 5 stars in the affordability category. This lender also earned a perfect score for availability — it offers conventional and government-backed loans and is available in all states.
Availability: All U.S. states (no refinances in New York)
Loans offered: Conventional, jumbo, FHA, VA, refinancing and more
Credit requirements: 620 for conventional loans, 600 for FHA loans, 600 for VA loans
Down payment minimum: 3%-5% for conventional loans, 3.5% for FHA loans, none for VA loans
Where to find: Online only
Pros
Close on time or receive up to $10,000 to cover additional costs
Potential rebate of up to $9,500 if you work with a SoFi partner real estate agent
Cons
Doesn’t offer USDA loans
No physical branch locations (everything happens online or in the app)
Bison State Bank scores well for affordability and availability. The bank offers FHA, VA and USDA loans on home purchases, which you could qualify for even with a lower credit score. It’s also a community bank, which might translate to more personalized service.
Availability: All U.S. states
Loans offered: Conventional, jumbo, FHA, VA, USDA
Credit requirements: 620 for conventional loans; 580 for FHA loans and VA loans
Down payment minimum: 3% for conventional loans; 3.5% for FHA loans, none for VA loans or USDA loans
Where to find: Branch locations and online
Pros
Customized online quote tool
No origination or hidden fees
Available nationwide
Cons
Preapprovals take slightly longer compared to other lenders
Not as many customer service contact options as other lenders
Optimum prioritizes speed, including same-day preapprovals. This lender also offers a $1,000 payment if borrowers’ loans don’t close on time. In addition, Optimum earned a perfect 5 out of 5 stars for affordability. Its rates tend to be lower than Bankrate averages, and it offers a handful of low-down-payment loan options.
Availability: 15 states, including Florida, California, Pennsylvania and Texas
Loans offered: Conventional, jumbo, FHA, VA, USDA, refinancing
Credit requirements: 580 for conventional loans
Down payment minimum: 5% for conventional loans, 3.5% for FHA loans, none for VA loans, 10% for jumbo loans
Where to find: Online and branch locations
Pros
Closings in as little as 14 days for conventional loans and closer to 30 for FHA and VA loans
Wide variety of loan terms including eight-, 10-, 12-, 15-, 20-, 22-, 27- and 30-years
Exceptional reviews from past customers
Cons
Only available in 15 states
Rates not available online without submitting your personal information
5% minimum down payment for conventional loans is higher than many other lenders
How a low credit score affects your mortgage
The best interest rates go to borrowers with the strongest credit scores. If you have a lower score, you’ll be quoted higher rates, which could translate to several thousand more in interest over the life of your mortgage.
Say you’re obtaining a $380,000, 30-year mortgage with a fixed 7% rate. Your monthly payment would be $2,528 (excluding homeowners insurance premiums and property taxes), and you’d pay $530,134 in interest over the 30-year loan term.
If you were to improve your credit and get a lower rate of 6.5% instead, your monthly payment would drop to $2,402, and you’d pay $484,669 in interest for the duration of the loan. Aside from the monthly payment savings of about $125, that’s a total interest savings of approximately $45,000.
You can use Bankrate’s mortgage calculator to compare different scenarios with higher and lower rates.
How to get a mortgage with bad credit
A bad credit score doesn’t automatically mean you won’t get approved for a mortgage, but you can expect to pay more for the loan. You could also have fewer options to choose from. Follow these tips to boost your approval odds:
Shop with lenders who specialize in mortgages for borrowers with fair or poor credit.
Consider using a credit union or online lender, which may offer more flexible loan options.
Look into government-backed loan programs, which might have less stringent qualification criteria. FHA loans, for example, have a lower minimum credit score requirement than conventional loans.
Stop charging with credit cards and refrain from opening any new credit accounts before you apply for your mortgage, as well as during the application process.
Frequently asked questions
If you have poor credit, consider an FHA loan, which allows for credit scores as low as 580 (or 500 if you can make a 10% down payment on the home). If you’re eligible, a VA loan (for service members and veterans) or a USDA loan (for buyers in rural areas) might also be easier to qualify for. Be wary of mortgage products that tout “guaranteed approval” without a credit check, or other offers with too-good-to-be-true claims. These are most likely bad actors, and going this route can potentially do more harm to your credit.
The lowest credit score to qualify for a mortgage depends on the loan program and the lender. Conventional loans usually have a minimum credit score of 620, but borrowers with higher credit scores tend to nab better rates. FHA loans have a lower minimum credit score requirement than conventional loans, and might make more sense for you if your credit needs improvement.
There are many ways to boost your credit score. First, review your three credit reports from the credit reporting bureaus at AnnualCreditReport.com. If you spot any errors or inaccuracies, contact the reporting agency as soon as possible to dispute. Once you have your scores, create a plan of attack for debt. Likewise, be sure to pay all of your bills on time and in full, if possible. While it can be tempting to cut off access completely, close credit cards with caution — your credit score can drop if you close an account. You’re better off simply not using the card, or using it sparingly and paying it back promptly.
To identify the best mortgage lenders for borrowers with a credit score below 620, Bankrate surveyed 75 lenders nationwide and scored each based on its self-reported data and research by Bankrate staff. We assigned scores based on a lender’s affordability, availability and borrower experience, giving equal weight to each category. Bankrate also collected data on each lender’s minimum credit score requirement for conventional, FHA, USDA and jumbo loans. To be named one of Bankrate’s best lenders for bad credit, lenders must have a stated, required minimum credit score for at least one of these products that is below 620. Lenders must also receive a Bankrate score of 4.7 or higher.
To receive a top score from Bankrate, lenders must offer mortgage rates lower than Bankrate’s tracked averages, and they generally also offer low-down-payment loan options and assistance for first-time homebuyers. In addition, lenders are usually licensed in more than 30 U.S. states, offer conventional and government-backed loans and typically provide at least one product for borrowers with credit scores of 620 or lower. Finally, our top-scoring lenders tend to make it easy for borrowers to compare rates and manage much of the loan process online, and they offer multiple options for customer support and generous rate-lock periods. Bankrate’s evaluations are independent and are not influenced by lender partnerships or advertising relationships. Read more about how Bankrate scores are determined here.
Some lenders may appear as honorable mentions, despite earning a Bankrate score of 4.7 or higher, due to eligibility restrictions — for example, concerning military affiliation — or limited availability (15 or fewer states).
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Ostrowski, J., & Taylor, M. (2026, February 23). Best mortgage lenders for bad credit in 2026. Bankrate. Retrieved March 02, 2026, from https://www.bankrate.com/mortgages/best-lenders/low-credit-score-mortgage-lenders/
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Ostrowski, Jeff & Mia Taylor. "Best mortgage lenders for bad credit in 2026." Bankrate. 23 February 2026, https://www.bankrate.com/mortgages/best-lenders/low-credit-score-mortgage-lenders/.
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Ostrowski, Jeff & Mia Taylor. "Best mortgage lenders for bad credit in 2026." Bankrate. February 23, 2026. https://www.bankrate.com/mortgages/best-lenders/low-credit-score-mortgage-lenders/.
