5 Places Where Lousy Credit Won’t Block a Home Purchase

September 10, 2018

In some places in the U.S., bad credit doesn’t have to be a deterrent to scoring a mortgage and buying a home. Researchers from realtor.com® analyzed metros to find where a less-than-perfect credit score—even those well under 650—can still land buyers a home.

Credit graph with pointer on poor

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To get a mortgage without top-notch credit, government loan programs may be key, researchers say. Such programs may be more available in some areas of the country than others. For example, the U.S. Department of Agriculture offers a no-money-down loan to borrowers with scores below 640 who plan to buy a home in a rural ZIP code. Federal Housing Administration loans allow borrowers with credit scores as low as 500 to qualify with a 10 percent down payment.

Realtor.com® calculated the share of mortgages in the largest 200 metros obtained with a 649 FICO score or lower between July 2017 and June 2018. (Note: The findings are limited to one metro per state for geographic diversity.) Realtor.com® found that in the following five cities, home buyers with poor credit may have the most luck scoring a mortgage:

1. Charleston, W. Va.

  • Median home list price: $147,300
  • Share of borrowers with a 649 FICO score or lower: 39.1 percent

2. Clarksville, Tenn.

  • Median home list price: $209,950
  • Share of borrowers with a 649 FICO score or lower: 35 percent

3. Corpus Christi, Texas

  • Median home list price: $239,750
  • Share of borrowers with a 649 FICO score or lower: 35 percent

4. Lakeland, Fla.

  • Median home list price: $229,500
  • Share of borrowers with a 649 FICO score or lower: 30.4 percent

5. Augusta, Ga.

  • Median home list price: $218,000
  • Share of borrowers with a 649 FICO score or lower: 26.5 percent
     

On the other hand, buyers in these cities tend to have higher credit scores:

Santa Cruz, Calif.

  • Median home list price: $936,050
  • Share of borrowers with a 649 FICO score or lower: 4.3 percent

Fargo, N.D.

  • Median home list price: $257,050
  • Share of borrowers with a 649 FICO score or lower: 5.4 percent

Ann Arbor, Mich.

  • Median home list price: $350,000
  • Share of borrowers with a 649 FICO score or lower: 6 percent