California Mortgages for People with Bad Credit

By Karen Lawson
Mortgage Credit Problems Columnist

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High home prices, a confusing variety of mortgage loan options, and changing real estate markets all provide challenges to aspiring homeowners in California. When to buy, how much to pay, and what kind of loan you'll need are all serious considerations. But what if you have bad credit, too? Although bad credit can create obstacles, there are loan programs available that can help you buy a home and improve your credit.

Affordable Housing Programs Available

Federal agencies such as The Department of Housing and Urban Development (HUD) and the Veterans Administration (VA) have loan programs with more flexible credit requirements than typical conventional financing. Another valuable resource for California homebuyers is the California Housing Finance Agency (CHFA). This agency specializes in providing affordable housing opportunities through its partnership with approved lenders. Your best access to these loan programs is through an approved California lender.

Paying the Price for Bad Credit: Beware of Scams and Unscrupulous Lenders

Depending upon how long you've had bad credit and the extent and reason for your problems, you may be charged more for a bad credit loan. Programs for first time homebuyers can help alleviate this situation by providing interest only payments, or down payment assistance. Again, you must find a lender approved by the agencies offering these types of programs. When shopping for lenders, ask if they offer loans geared toward the needs of first time or borrowers with bad credit. As with other types of lenders, there are California loan companies that will offer loans at very high rates to those with bad credit. It's important to shop carefully, and to utilize bad credit loan programs offered through housing agencies, rather than taking the first loan you can find.

California Housing Finance Agency

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