Also, be aware that lenders may change their requirements depending on the economy. There are certain times that lenders may be more flexible about approving a loan for a homebuyer with bad credit. During economic slowdowns, lenders may tighten up their credit score requirements, making it more difficult to qualify. During a strong, stable economy, they’ll relax those requirements.
First-time homebuyers can also generally find more flexible credit score requirements through certain programs, like the HomePath Ready Buyer through Fannie Mae and HomeOne lending program through Freddie Mac. It’s important to note that both programs can also work for homebuyers that have owned previously, as long as you haven’t owned a home in three years or more.