top of page

Did you know you can buy a home without a credit score?

Fannie Mae, Freddie Mac, USDA, FHA, and VA all have loan options for borrowers without a credit score.

So what do you need? It depends on what type of loan you are looking for.

Let’s break it down by each product type:

For Fannie Mae and Freddie Mac, you will need a co-borrower with a credit score and that person must occupy the house with you. So if mom or dad were willing to co-sign for you, they wouldn't be a valid co-borrower unless they intended to live in the home with you. Therefore, your co-borrower will need to be someone who plans to live in the home as well such as your spouse, partner, or friend.

Here are the other requirements for Fannie/Freddie (aka The Agencies):

  • Purchases and rate/term refinances only - no “cash out refi’s” are allowed

  • 1 unit only (if you want to learn more about 2-4 units with 5% down, click here)

  • Fixed rate mortgages only - the agencies don’t allow for adjustable rate mortgages.

  • If the borrower without the score has more than 50% of the qualifying income, additional non-traditional credit is required. Non-traditional credit could be rent, utilities, cell phone, auto insurance, etc.

Let's look at the FHA requirements:

  • Three non-traditional trade lines (i.e. rent, utilities, cell phone, auto insurance, etc) must be verified with 12 months of on-time payment history

  • If you don’t have a verification of rental history, you must be able to document you’ve been living rent free with a friend/family member

  • Debt ratios of 31/43 – for more info on debt ratios click here

  • 1 month PITI in reserve from your own funds after closing (i.e. if your mortgage payment is $2,000, you must have at least $2,000 in reserves available - for more info on reserves, click here)

USDA has the following requirements:

  • Max ratios of 29/41

  • No reserve requirements

  • Two trade lines when at least one of the trades is a 12 month rental verification

  • If living rent free, a minimum of 3 tradeline requirements

  • The 3 alternative tradelines must be open, closed, and/or paid in full by the applicant. It must have at least 12 months history and if the trade line is closed, it can’t have been closed more than 6 months prior to the application.

VA is a little bit simpler:

  • 3 non-traditional trade lines (if there are not 3, acceptable explanation why there are not 3 alt trade lines available)

  • Meet the residual income requirement (click here for an explanation of the residual income calculation)


bottom of page