Best Mortgage Lenders That Accept a 500 Credit Score

You can get a mortgage even with a 500 FICO score. Discover the best mortgage lenders for people who have bad credit. 

Mortgages make homes more accessible, but some worry that a bad credit score disqualifies them from homeownership. Luckily, several mortgage lenders will work with you even if you have bad credit. While building credit before applying for a mortgage will land you a better term, you can technically buy a home with less-than-stellar credit. Some of the best mortgage lenders accept a 500 credit score.

Quick Winners List

Best For Borrowers Without an SSN: New American Funding

Pros:

• NAF cash program
• More than 275 branches
• Various financial products available

Cons:

• Personalized rates are not available online
• High fees

New American Funding offers many loan products, including construction loans, government-backed mortgages and individual taxpayer identification number (ITIN) loans. New American has excellent customer service, customized quotes and the option to use a home equity line of credit (HELOC) for an owner-occupied or a second home. With a focus on helping the underserved community, New American Funding knows how to help you. 

• Minimum credit score: 500 (FHA loans)
• Minimum down payment: 3.5%
• States served: All 50 states

Best for First-time Homebuyers: Alterra

Pros:

• Prioritizes underserved communities
• Home equity loans and HELOCs are also available
• An SSN is not required during the loan application

Cons:

• Only available in 40 states
• Rates are not published online

Alterra works to expand homeownership in underrepresented groups. This includes options for borrowers with low credit scores, first-time homebuyers and people ineligible for Social Security numbers. With a simple online application and government-backed mortgages for low- to moderate-income borrowers, Alterra has options and may work with you regardless of your credit score and income. 

• Minimum credit score: 580 (FHA loans)
• Minimum down payment: 3.5%
• States served: Not available in Alaska, Hawaii, Maine, Massachusetts, New York, North Dakota, Rhode Island, South Dakota, West Virginia and Vermont

Best for Low Down Payment Options: Citibank

Pros:

• Make a down payment as low as 3%
• Citibank customers are eligible for discounts and lower rates
• Citibank has hundreds of domestic and international branches

Cons:

• It can take 1-2 months to get a mortgage from Citibank
• Personalized rates are not available online

Citibank offers a large, established banking brand with a strong reputation. Borrowers could secure a low down payment mortgage, government-backed loans or work with Citibank’s loan officers for proprietary options. The bank has a wide range of financial products that can meet your needs such as bank accounts, credit cards and brokerage accounts. Citibank customers can get discounts and lower mortgage rates based on their account balances.

• Minimum credit score: 580 (FHA loans)
• Minimum down payment: 3%
• States served: All 50 states

Best for Flexible Options: Carrington

Pros:

• Multiple options for low down payments for low-credit borrowers
• Loan program available for people who recently went bankrupt
• Quick closing

Cons:

• Does not offer HELOCs
• Personalized rates are not available on the website

Carrington offers various mortgage options for buyers with low credit or other unusual financial situations. It specializes in helping credit-challenged borrowers interested in government loan products. If you want simple application options and personalized service, Carrington could help.

• Minimum credit score: 500 (FHA loans)
• Minimum down payment: 3%
• States served: All 50 states and Puerto Rico

Best for Borrowers with Low Credit: loanDepot

Pros:

• You can get financing with a 500 FICO score
• Various home loans available
• Lifetime Guarantee Program

Cons:

• Personalized mortgage rates are not available on the website
• High fees

loanDepot offers a wide range of home loans, plus some choices that let you get financing with a FICO score as low as 500. The mortgage lender also has a Lifetime Guarantee Program where they will waive all lender fees if you refinance with them in the future. You can save thousands of dollars by avoiding these fees. 

• Minimum credit score: 500 (FHA loans) but depends on the provider
• Minimum down payment: 3% but depends on the provider
• States served: All 50 states

Best for Self-Employed Borrowers: CashCall Mortgage

Pros:

• Financing options for self-employed borrowers
• Competitive rates that you can find on the website
• Online chat tool lets you connect with a mortgage expert

Cons:

• No USDA loans
• The lender is only licensed in a few states

CashCall Mortgage offers various loan options for borrowers with low credit scores. It also offers options for self-employed homebuyers such as bank statement loans or using 1099 forms as documentation. To get a personalized quote, speak with a loan officer.

• Minimum credit score: 580 (FHA loans) 
• Minimum down payment: 3% 
• States served: Arizona, California, Colorado, Florida, Idaho, Nevada, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas and Washington

What is a 500 Credit Score?

Your credit score can range from 300-850 and a higher credit score will give you access to more competitive rates and terms. While a 500 credit score isn’t the best, some lenders work with people who have 500 FICO scores.

Michael Branson, the CEO of All Reverse Mortgages, a mortgage lender, explains the uphill battle borrowers have if their credit scores are at 500.

“It’s possible, but expect that it will be challenging and the terms may not be great. A 500 credit score is considered low, so lenders may be hesitant to approve you. They might require a larger down payment, a higher fee or even a cosigner to offset the risk. It’s definitely not impossible, but it’s important to be prepared for stricter requirements and less favorable terms.”

How To Improve Your Credit Score

If you have a low credit score, you can apply for an FHA loan and consider other low-credit options. However, a higher credit score will give you more options. Furthermore, you can build credit while looking for a new home. Branson suggests several strategies to add more points to your FICO score.

Pay Off Outstanding Debt

“One of the quickest ways to improve your credit score is by reducing the amount of debt you owe. Start by paying down high-interest credit cards or any past-due balances. As your balances go down, your credit utilization rate (the amount of credit you’re using compared to your limit) will improve, which can have a positive impact on your score,” Branson explains.

Setting a budget and avoiding impulsive purchases can make it easier to pay off outstanding debt. You may also have to pick up a side hustle, work longer hours or look for a career that offers better pay.

Make Payments On Time

Your FICO score consists of five key elements, but none matter as much as your payment history. This component makes up 35% of your FICO score and positively impacts other key factors that influence your score.

“Your payment history is one of the biggest factors in your credit score. Even one missed payment can drag your score down, so set reminders or use autopay if you need to. Consistently paying bills—credit cards, loans, even utilities—on time shows lenders you’re reliable and helps build your score over time,” Branson explains.

Stop Taking On New Credit For Now

Applying for a mortgage is a big deal; you want to get the best rate possible. Branson suggests holding off on other loan applications while looking for a home.

“Every time you apply for a new credit card/loan, it can result in a hard inquiry, which can lower your credit score temporarily. If you’re focused on improving your score, it’s best to hold off on opening new accounts until your score is where you want it to be. Instead, focus on managing your existing accounts well. This will have a more positive effect in the long run.”

Getting a Mortgage For Your Home

While improving your credit score will boost your chances of getting a great home loan, you don’t need the best credit score to get approved for a mortgage. Comparing lenders will help you find the most competitive rates and terms. In the meantime, you can rebuild your score by making on-time payments, avoiding additional loan applications and paying off outstanding debt.

Why You Should Trust Us

Benzinga has reviewed mortgage lenders and provided real estate content for over 15 years. Additionally, I am a Certified Personal Finance Counselor who has been a financial journalist for five years. I have also written for US News & World Report, Bankrate and Newsweek. We also interviewed a real estate expert for this article.

Methodology 

We compared each lender based on their rates, features, loan options, credit score requirements, user experience and customer service. We focused on mortgage lenders working with borrowers with credit scores in the 500-580 range. You can review our full methodology here.

Frequently Asked Questions 

Sources

Branson, Michael. Personal interview with the author. 17 Apr. 2025.