subject: Bad Credit Does Not Mean Disqualification For Home Loans [print this page] Nevada has been one of the hardest hit states with the real estate meltdown and poor economy in general. Many have lost their homes to foreclosures and many others are in homes that are "under water" or have market values that are lower than the money they owe on their Nevada home loans. Job losses, extended unemployment, and under-employment have damaged the credit of many who would buy some of the many homes now available at reduced and below market prices in Reno if they felt they could qualify for a favorable mortgage.
The good news is that if you are one of these people with less than stellar credit scores, you may still be able to buy that home you've been dreaming of. In spite of news to the contrary about how lenders are being particularly stingy with credit approvals these days, there are excellent programs that can help you get a Nevada mortgage at competitive rates in spite of your credit challenges.
One of the best programs going for buyers is a FHA backed mortgage. In 1934, at the time of the Great Depression the Federal Housing Administration, or FHA, was founded to help Americans buy homes at a time when few were able to raise the money to do so. The FHA was designed to offer loans to people who didn't have the money for down payments and those who had credit problems.
If you can qualify for a FHA backed mortgage, you can work with banks or private lenders who will be much more likely to approve your application since FHA insurance guarantees the loan. This transfers the risk away from the lender to allow those with credit challenges to get favorable rate Nevada home loans. If you are a first time buyer it increases your chances of being FHA approved. FHA loans are also designed to assist buyers who purchase distressed properties, or what the real estate industry often refer to as "fixer uppers."
The FHA program is set up to let you borrow money for the home and for the renovations to bring it back to market standards.There are also private lenders who are willing to work with people with credit problems. Private lenders are investors who are unaffiliated with traditional banks and are thus not as restricted in their qualifying requirements.
In short, if you want to take advantage of the reduced real estate pricing to buy a home but have fear you cannot qualify for a Nevada mortgage, don't give up before you try. You may be more qualified than you think.
