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No Credit? You can still qualify for a home loan!2.06.2017

What does it mean to have little to no credit as a borrower?

Having no credit history means a borrower doesn’t have enough of a credit history for credit bureaus to determine the likelihood that they will pay back borrowed money. If a borrower has no credit, it does not automatically mean they cannot apply for a mortgage. There are programs out there for borrowers in this exact situation.

Mortgage Options, Inc. offers a Flexible Financing with Low Down Payment Program. This program is for applicants with little to no credit. Here’s how the program works! If they have no credit, a borrower just needs to have 3.5% down payment and have at least 3 non-traditional credit lines for at least 3 months.

To establish 3 non-traditional credit lines, the borrower must have 3 references and at least one of the following:

  • Rental housing payments (subject to independent verification if the borrower is a renter)
  • Telephone service
  • Utility company reference (if not included in the rental housing payment)
    • Gas
    • Electric
    • Water
    • Television Service
    • Internet Service

If the mortgagee cannot establish credit using the references above, they may also consider using:

  • Insurance premiums that are not deducted through payroll (medical, auto, life, renter’s insurance)
  • Payment to childcare providers such as daycare
  • School tuition
  • Retail store credit cards
  • Rent-to-Own payments (like furniture or appliances)
  • Payment of medical bills not covered by insurance
  • A 12-month history of a savings account with regular deposits resulting in an increased balance in the account.
    • Made, at minimum, quarterly
    • Not payroll deducted
    • Caused no nonsufficient funds (NSF) checks
  • An automobile lease
  • A personal loan from an individual with repayment terms in writing and canceled checks to support documentation of payments on the loan.
  • A 12-month history of borrower payment on the account for which the borrower is an authorized user.


Using these references to establish credit worthiness, Mortgage Options, Inc. can help a borrower secure the mortgage they need to get started on the path to homeownership. If you have little to no credit and are thinking there’s no way you can become a homeowner, contact us today!

Giving you more options with Mortgage Options, Inc.