In 2024, over 29% of homebuyers chose FHA loans to buy their homes because they accept credit scores as low as 580. Additionally, VA and USDA loans, with their low credit score requirements, provide even more opportunities to own a home in the Peach State.
Houzeo, Georgia’s best home-buying website, helps you find an affordable home with ease. You can browse Georgia listings within your budget, calculate your mortgage, and submit offers online. It’s a faster, easier way to buy a home—even with bad credit.
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Can You Get a Mortgage With Bad Credit in Georgia?
Yes, you can get a mortgage with bad credit in Georgia!
A credit score below 580 is considered a poor score. It reflects a history of high debt and missed payments. However, government-backed mortgages have lenient criteria. Georgia also offers specialized programs to help bad-credit buyers achieve homeownership.
5 Steps to Buy a House With Bad Credit in Georgia
16% of Americans have a poor credit score. If you fall into this category, here’s how you can go for buying a house with bad credit:
Step 1: Review Your Credit Score
Before you buy a house in Georgia, check your credit report for errors and negative marks that could affect your credit score. If you find mistakes on your credit report, you can dispute them directly with the credit bureau.
Step 2: Look for Mortgage Options With Bad Credit
Here’s a list of loans and their minimum requirements:
- Conventional Loans: The minimum credit score required for conventional loans is 620 for Fannie Mae and 660 for Freddie Mac. However, a 3% down payment is mandatory.
- FHA Loans: With FHA loans for bad credit in Georgia, you can buy a house with a credit score as low as 500 with a 10% down payment. If your score is 580 or above, you can put 3.5% down. However, you can only use FHA loans to purchase a primary residence.
- VA Loans: VA loans are ideal for active-duty military and their spouses in Georgia. While VA loans have no strict credit score requirement, most lenders prefer a minimum score of 620.
- USDA Loans: The US Department of Agriculture offers USDA loans to encourage homeownership in rural areas like Peach County, Turner County and Dawsonville. While the loans don’t have a minimum credit score, lenders prefer a score of 620 or above.
Step 3: Consider Subprime Lenders
Subprime lenders, like Georgia’s Own Credit Union, offer mortgages tailored for people with bad credit in Georgia. They evaluate factors such as your employment history, income, and ability to pay down, rather than relying solely on credit scores.
These lenders also provide flexible loan terms and accept a higher debt-to-income ratio, often 50% or more for subprime mortgages. However, DTI requirements can vary by lender and loan type, which makes it easier for you to secure financing.
Step 4: Save for a Larger Down Payment
For traditional mortgages in Georgia, the minimum down payment typically ranges from 3% to 20%. However, if you have a bad credit score, a minimum of 10% is usually required.
In the Georgia real estate market, a larger down payment can improve your chances of securing a loan. Lenders also view this as a sign of financial responsibility.
Step 5: Get Pre-Approved
For first-time home buyers in Georgia, a mortgage preapproval is important, especially for those with bad credit scores. It informs you about your mortgage interest rate and monthly payments and helps you manage your finances better.
How to Get Georgia Loans With Bad Credit?
It can be challenging to get a home loan for bad credit in Georgia. But it is possible if you have the right approach. Here’s what to do:
- Pay Off Existing Debt: Before you buy a house in Georgia with bad credit, you should pay back the money you already owe. Georgia lenders often consider a manageable debt-to-income ratio below 36% as a sign of financial stability.
- Budget Wisely: Factor the cost of living in Georgia into your home-buying budget. This includes utilities, insurance, property taxes, and transportation costs.
- Get a Co-Signed Mortgage: Look for a co-signer with a strong credit score to strengthen your loan application. This person will be responsible for paying back the co-signed mortgage if you default on payments.
- Explore Georgia-Specific Programs: Georgia offers programs like the Georgia Dream Homeownership Program to help buyers with bad credit. It provides affordable mortgage financing and down payment assistance to buyers with credit challenges.
- Understand the Mortgage Application Process: You must be well-versed with Georgia’s mortgage requirements, including state disclosures and lender criteria. Prepare documents like income proof and credit explanations to strengthen your application.
6 Best Cities in Georgia for Buyers With Bad Credit
| City | Best Suited for Bad Credit Buyers | Find Houses for Sale |
|---|---|---|
| Atlanta | Subprime lenders, FHA, and VA loans | Houses for Sale in Atlanta |
| McDonough | USDA loans and credit repair-friendly programs | Houses for Sale in McDonough |
| Marietta | FHA loans and first-time buyer assistance | Houses for Sale in Marietta |
| Athens | FHA, USDA, and local down payment grants | Houses for Sale in Athens |
| Savannah | VA loans, subprime options, and city housing incentives | Houses for Sale in Savannah |
| Peachtree City | FHA, credit unions, and flexible mortgage options | Houses for Sale in Peachtree City |
Can I Get a Mortgage With Bad Credit?
Yes! You can get a mortgage with bad credit in Georgia. There are various options available for buyers in this situation. FHA loans for bad credit need a minimum credit score of 500 with a 10% down payment, while VA loans for veterans have no strict credit score requirements.
Apart from that, lenders also assess more than just your credit score; they also consider your income, savings, and overall financial situation. So, don’t wait! Make your dream of homeownership in Georgia come true today!
» Need More Clarity? Read these exclusive Houzeo reviews and learn why the platform is the best in Georgia’s competitive housing market.
