How to Get Approved for an FHA Loan despite Bad Credit

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FHA (Federal Housing Administration) loans are very flexible, and you may qualify for an FHA loan with bad credit. You will need at least three percent down, but if your credit is poor, it is in your best interest to put more down, to lessen the risk for the lender. Credit is only a part of the application. Down payment and job history are equally important.


If you have had a bankruptcy, you will still be eligible for an FHA loan two years after the discharge date. You need to demonstrate a good history of payments since the bankruptcy discharge.


A previous foreclosure will not disqualify you for an FHA loan. Two to three years after the foreclosure date, you can apply for a loan. You may be asked for a letter stating why you had the foreclosure.

Late Payments

If you have had some late payments, or even collections, you will still qualify for an FHA loan as long as your overall credit picture shows responsibility. If you had a job loss and had a period of bad credit history but then showed improvement, the FHA will still approve your loan.


If you have a federal lien, like a tax lien, you will not be eligible. And federal student loans cannot be delinquent, or you will be disqualified.