Best mortgage lenders for bad credit in 2026

Written by

Jeff Ostrowski

and

Mia Taylor,

Edited by

Katie Lowery, CFHC

Published on June 19, 2026 | 3 min read

Bankrate is always editorially independent. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . Our is to ensure everything we publish is objective, accurate and trustworthy.

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.

Best mortgage lenders for bad credit

Lender	Credit requirements	Down payment minimum	Bankrate score
Better	620 for conventional loans, 580 for FHA loans, 620 for VA loans	5% for conventional loans, 3.5% for FHA loans, none for VA loans	4.9
FourLeaf Federal Credit Union	580 for conventional loans, 500 for FHA loans	3% for conventional loans, 3.5% for FHA loans	4.9
PNC Bank	620 for conventional loans, 620 for jumbo loans, 600 for FHA loans, 640 for USDA loans	3% for conventional loans, 3.5% for FHA loans, none for VA loans or USDA loans	4.9
Sage Home Loans	620 for conventional loans, 580 for FHA loans	3% for conventional loans, 3.5% for FHA loans, none for VA loans	4.9
Tomo Mortgage	580 for conventional loans	3% for conventional loans, 3.5% for FHA loans, none for VA loans	4.9
LowRates.com	620 for conventional loans, 700 for jumbo loans, 580 for FHA loans, 500 for VA loans	3% for conventional, 3.5% for FHA loans, none for VA loans	4.8
Pennymac	620 for conventional loans, 580 for FHA loans, 620 for VA loans	3% for conventional loans, 3.5% for FHA loans, none for VA loans and USDA loans	4.8
SoFi	620 for conventional loans, 600 for FHA loans, 600 for VA loans	3%-5% for conventional loans, 3.5% for FHA loans, none for VA loans	4.8
Bison State Bank	620 for conventional loans; 580 for FHA loans and VA loans	3% for conventional loans; 3.5% for FHA loans, none for VA loans or USDA loans	4.7
Optimum First Mortgage	580 for conventional loans	5% for conventional loans, 3.5% for FHA loans, none for VA loans, 10% for jumbo loans	4.7

Better

4.9

Learn more in our Bankrate review

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

FourLeaf Federal Credit Union

4.9

Learn more in our Bankrate review

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)

Doesn’t offer USDA loans

PNC Bank

4.9

Learn more in our Bankrate review

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 Home Loans

4.9

Learn more in our Bankrate review

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

Offers verified approvals

Most mortgages close within 27 days
Cons

No branch locations

Tomo

4.9

Learn more in our Bankrate review

With its low APRs, low down payment requirements and minimal fees, Tomo Mortgage 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: 41 states, plus Washington, D.C.
- 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

Provides e-closings and remote notarization
Cons

Doesn’t offer USDA loans

Standard rate lock is only 30 days

LowRates.com

4.8

Learn more in our Bankrate review

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

Pennymac

4.8

Learn more in our Bankrate review

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

Additional discounts if using a partner agent
Cons

Online only

Below-average customer service ranking

SoFi

4.8

Learn more in our Bankrate review

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

4.7

Learn more in our Bankrate review

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 First Mortgage

4.7

Learn more in our Bankrate review

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.
Ask a trusted friend or relative with excellent credit to co-sign your mortgage.
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. Lenders receive penalties against their total scores for each consent decree, penalty in a case brought by a federal regulator or in a certified, federal class-action lawsuit, or adverse federal judgment for harming mortgage borrowers. 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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Written by

Jeff Ostrowski

Writer and Housing Market Analyst

Best mortgage lenders for bad credit

Better

Why we chose Better

Lender details

Pros and cons

Pros

Cons

FourLeaf Federal Credit Union

Why we chose FourLeaf Federal Credit Union

Lender details

Pros and cons

Pros

Cons

PNC Bank

Why we chose PNC Bank

Lender details

Pros and cons

Pros

Cons

Sage Home Loans

Why we chose Sage Home Loans

Lender details

Pros and cons

Pros

Cons

Tomo

Why we chose Tomo

Lender details

Pros and cons

Pros

Cons

LowRates.com

Why we chose LowRates.com

Lender details

Pros and cons

Pros

Cons

Pennymac

Why we chose Pennymac

Lender detail

Pros and cons

Pros

Cons

SoFi

Why we chose SoFi

Lender details

Pros and cons

Pros

Cons

Bison State Bank

Why we chose Bison State Bank

Lender details

Pros and cons

Pros

Cons

Optimum First Mortgage

Why we chose Optimum First Mortgage

Lender details

Pros and cons

Pros

Cons

How a low credit score affects your mortgage

How to get a mortgage with bad credit

Frequently asked questions

What is the easiest home loan to get approved for with bad credit?

What is the lowest credit score needed for a mortgage?

How can I improve my credit score?

Methodology

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