Bad Credit Mortgage 2026: Complete Survival Guide
Credit score 500-619? You CAN still get a mortgage. FHA allows 500 with 10% down. Here's your complete roadmap—from bankruptcy recovery to closing day.
📊 Bad Credit Mortgage Quick Facts (2026)
500
Minimum FHA Score
3.5%
Min Down (580+)
2 yrs
After Ch.7 (FHA)
6.75%
Avg Rate (580)
Minimum Credit Scores by Loan Type (2026)
| Loan Type | Min Score | Down Payment | Typical Rate |
|---|---|---|---|
| FHA (Best for Bad Credit) | 500-579 | 10% | 7.0-7.5% |
| FHA | 580+ | 3.5% | 6.5-7.0% |
| Conventional | 620+ | 3-5% | 6.5-7.5% |
| VA (Veterans) | 580-620* | 0% | 6.0-6.5% |
| USDA (Rural) | 640+ | 0% | 6.25-6.75% |
| Non-QM (Alternative) | 500+ | 10-20% | 7.5-9.0% |
*VA has no official minimum, but most lenders require 580-620
⏱️ Waiting Periods After Bankruptcy
| Event | FHA | Conventional | VA |
|---|---|---|---|
| Chapter 7 Bankruptcy | 2 years | 4 years | 2 years |
| Chapter 13 Bankruptcy | 1 year* | 2 years after discharge | 1 year |
| Foreclosure | 3 years | 7 years | 2 years |
| Short Sale | 3 years | 4 years | 2 years |
*1 year into repayment plan with court approval
Your 6-Step Bad Credit Mortgage Action Plan
Step 1: Know Your REAL Credit Score
Don't guess—get your actual FICO scores from all 3 bureaus. Mortgage lenders use the middle score (not the lowest, not the highest). Free options:
- AnnualCreditReport.com — Free reports (no scores)
- Credit Karma — Free VantageScore (not FICO, but close)
- Experian — Free FICO Score 8
- Your bank/credit card — Many offer free FICO scores
Step 2: Fix Errors on Your Report
25% of credit reports have errors. Dispute anything incorrect:
- Accounts that aren't yours
- Late payments you made on time
- Debts already paid off
- Incorrect balances
Disputes can boost your score 20-100 points in 30 days.
Step 3: Quick Score Boosters (30-60 Days)
🚀 Fastest Ways to Boost Your Score
- Pay down credit cards to <30% utilization — +20-50 points
- Become an authorized user on someone's old card — +10-30 points
- Experian Boost — Add utility/phone payments — +5-15 points
- Pay for delete — Negotiate with collections — +20-100 points
- Rapid rescore — Lender updates bureaus in 48 hours
Step 4: Choose the Right Loan Program
Based on your score:
- 500-579: FHA with 10% down (limited lenders)
- 580-619: FHA with 3.5% down (many lenders)
- 620-659: FHA or Conventional (compare both)
- 660+: Conventional usually wins
Step 5: Find Bad-Credit-Friendly Lenders
Not all lenders work with bad credit. These specialize in 580+ scores:
- Carrington Mortgage — Goes to 500 score
- New American Funding — Manual underwriting available
- Guaranteed Rate — FHA specialist
- Freedom Mortgage — High approval rates
Step 6: Get Pre-Approved (Not Pre-Qualified)
Pre-approval means a lender has verified your income, assets, and credit. It's much stronger than pre-qualification. With bad credit, this is essential—sellers want to know you can actually close.
🏠 Ready to Get Pre-Approved?
See which lenders approve your credit score. Takes 2 minutes, no SSN required.
Check My Approval Odds →📚 Bad Credit Mortgage Hub
Deep-dive guides for your specific situation:
Frequently Asked Questions
What is the minimum credit score for a mortgage in 2026?
The absolute minimum is 500 for FHA loans (with 10% down). Most lenders require: FHA - 580, Conventional - 620, VA - 580-620, USDA - 640.
Can I get a mortgage with a 580 credit score?
Yes! FHA loans allow 580 scores with just 3.5% down. Many lenders specialize in 580-619 scores. Expect rates 0.5-1% higher than prime borrowers.
How long after bankruptcy can I get a mortgage?
Chapter 7: 2 years (FHA), 4 years (Conventional). Chapter 13: 1 year into repayment (FHA), 2 years after discharge (Conventional).
Sarah Mitchell
Senior Mortgage Advisor & VA Loan Specialist
Senior Mortgage Advisor with 12+ years specializing in VA loans and first-time buyer programs.