Can You Buy a House With No Credit?

Key Takeaways

You can buy a house with no credit by using manual underwriting and alternative payment history.
A larger down payment strengthens your application when you lack a traditional credit score.
Multiple loan programs allow borrowers with no credit, including FHA, VA, USDA, and manual-underwritten conventional loans.
Building even limited credit improves your future mortgage options and may lower your interest rate.

Buying a home without a credit history is more achievable than ever. As of late 2025, Fannie Mae, Freddie Mac, and conventional mortgage programs now allow borrowers to qualify with no credit score, making it possible to pursue buying a house with no credit, qualify through manual underwriting, and explore mortgage options for buyers with no credit. These updates give first-time buyers more flexibility, but you still need preparation and documentation to qualify successfully.

Do You Need Credit to Buy a House?

You do not need a traditional credit score to buy a home. Although a credit history can simplify the mortgage process and improve your loan terms, lenders can still approve applicants who lack established credit. You may need a higher down payment or more documentation, but you can still secure financing with the right approach.

No Credit vs. Bad Credit

Understanding the difference between no credit and bad credit helps you prepare for the mortgage process.

Type	What It Means	How Lenders View It
No Credit	You have little or no borrowing history.	Less risky because there are no delinquent accounts.
Bad Credit	You have late payments, collections, or high balances.	More risky because past behavior shows credit issues.

Many lenders view no credit as more manageable than bad credit, which is why borrowers with no credit often qualify more easily than those with damaged scores.

How to Buy a House With No Credit History

You can still qualify for a mortgage without a credit score by following a slightly different process. Here’s how lenders evaluate applicants with no credit.

Choose Manual Underwriting

Manual underwriting allows lenders to review alternative financial documentation when no traditional credit report exists. Instead of relying on a score, lenders verify:

Rent payment history
Utility and insurance payments
Bank statements
Stable income and employment records

You usually need 12–24 months of consistent, on-time payments to demonstrate reliability. Although manual underwriting requires more paperwork, it opens the door for buyers without established credit.

Make a Larger Down Payment

A higher down payment helps reduce lender risk and strengthens your application. Some programs allow as little as 3% down, but buyers with no credit usually need 10% or more. A larger down payment may also reduce your monthly mortgage payment.

Use a Co-Signer

A co-signer with strong credit can help you qualify if you lack your own credit history. This strategy gives the lender extra security, but both parties must understand the financial responsibility involved.

Explore Nontraditional Lenders

Local banks, credit unions, and online lenders sometimes offer flexible guidelines for borrowers with no credit. These lenders often have more experience with manual underwriting and may provide additional loan options.

Mortgage Options for Buyers With No Credit

Even without a credit score, you can access several loan programs. Requirements differ depending on the loan type.

Conventional Loans

Conventional mortgages backed by Fannie Mae and Freddie Mac now allow borrowers with no credit score through manual underwriting.

Requirement	Conventional Expectation
DTI Ratio	36% or less
Down Payment	Minimum 10%
Cash Reserves	At least 12 months
Mortgage Insurance	PMI based on the lowest credit tier

FHA Loans

FHA loans are ideal for buyers with limited credit because they accept alternative credit documentation.

FHA Requirement	What to Expect
Credit Score	Not required with manual underwriting
Down Payment	10% down with no credit score
DTI Ratio	Typically 43% or less
Approval Basis	Alternative payment history and income verification

VA Loans

VA loans offer flexible options for eligible service members, veterans, and surviving spouses. The VA does not set a minimum score, and some lenders accept alternative credit documentation for applicants without established credit.

USDA Loans

USDA loans serve rural homebuyers and offer zero-down financing. Most lenders prefer a 640 score, yet some allow manual underwriting with at least 12 months of documented payment history.

Ways to Build Credit for Better Mortgage Options

Building a small amount of credit can increase your loan options and help you secure lower rates. You can start by:

Becoming an authorized user on a family member’s credit card
Opening a credit-builder card
Applying for a secured card
Using a co-signed credit card to build early credit history

Even six to twelve months of positive activity can significantly improve your approval odds.

You Can Buy a House With No Credit

A lack of credit history does not block your path to homeownership. With manual underwriting, alternative payment documentation, and a strong employment record, many borrowers qualify for a mortgage without a score. You may start with slightly higher rates, but you’ll have the option to refinance once your credit profile improves.

If you’re ready to explore your loan options or need help navigating the process, connect with a mortgage professional who can guide you every step of the way.

FAQs About Buying a House With No Credit History