To buy a house with credit issues, start by repairing your credit score through disputing inaccuracies, paying down credit utilization, and maintaining on-time payments. Explore government-backed loans like FHA mortgages, which accept lower credit scores (as low as 580) and require smaller down payments (3.5%). Consider credit-builder loans or secured credit cards to rebuild credit history. Save for a down payment and closing costs, and consult a housing counselor for personalized guidance.

Credit repair is critical because a higher score reduces mortgage costs and eligibility. For example, a 2023 Federal Housing Administration (FHA) report found that buyers with scores below 600 faced higher interest rates or denials. FHA loans accounted for 18% of all home purchases in 2022, with approval rates rising 15% year-over-year due to relaxed underwriting. Credit-builder loans, offered by 85% of U.S. credit unions, helped 500,000+ consumers in 2022 build credit scores by 50 points on average. Additionally, Fannie Mae’s 2023 guidelines show that 30% of approved loans for buyers with scores 500–600 included down payments as low as 3%. These programs demonstrate that even with credit challenges, homeownership remains achievable through targeted strategies and accessible financing.