Is it possible to get a mortgage without a credit score?

[Shu Matsuo Post]

Hi lenders,

I'm a long-distance investor from Japan.

I have a friend who is interested in investing in the US rental market but he has no credit score. He is a Japanese American but moved to Japan right after college so he does not have a credit score. This is stopping him from investing in the US.

What does it take to get a mortgage without a credit score?

Thanks in advance!

Shu

[Nathan Grabau]

Hi Shu, it will probably not be possible to get a conventional mortgage but there are lots of non qualified products that would be available to your friend. I have used commercial lending for all of my long distance properties, and typically commercial lenders are more concerned with the viability of the rental as a business. I was able to get commercial lending with 20% down, a DSCR of 1.25 and by agreeing to use my Realtor in Iowa as my property manager.

I am a Realtor in Colorado and am sure that we could find properties here that they could do something similar with as well. Iowa has stronger cashflow while Colorado has stronger appreciation. If you send me a message I am happy to start working on investigating this here in CO or getting you in touch with my Realtor/ PM in Iowa! 

[Wale Lawal]

@Shu Matsuo Post

It's possible to get a mortgage if you don't have a credit score, but you'll probably have to look harder to find the right lender — and be prepared to provide extra documentation to show a record of paying bills on time.

Government-backed home loans allow lenders to use nontraditional credit data to evaluate borrowers who don't have credit scores. They include:

• FHA loans, backed by the Federal Housing Administration. They are open to first-time and repeat home buyers.
• USDA loans, backed by the U.S. Department of Agriculture. These loans are for rural home buyers.
• VA loans, backed by the U.S. Department of Veterans Affairs. Only active and veteran military members and some surviving spouses are eligible.

It's also possible to get a conventional loan without a credit score. Fannie Mae and Freddie Mac, the government-sponsored enterprises that drive many of the underwriting decisions lenders make, have guidelines for evaluating conventional borrowers with no traditional credit.

Each loan program and lender has its own requirements, but generally to qualify with nontraditional credit you'll need to have made 12 months of timely payments for at least two to three types of continuing obligations, such as housing, utilities and insurance.

Be prepared to provide documentation of your payment history, such as canceled checks, money order receipts and account statements. The lender may also order a special report from a company that verifies rent, utility, phone and other payments.

Read this article for more details https://www.nerdwallet.com/art...

Good Luck!

[Anastasia G.]

Hello @Shu Matsuo Post

Yes you are able to, there are many programs in Non QM world that allow you to purchase properties; in traditional space as well if lender allows manual underwriting. 

Feel free to reach out

[Erik Estrada]

Quote from @Shu Matsuo Post:

Hi lenders,

I'm a long-distance investor from Japan.

I have a friend who is interested in investing in the US rental market but he has no credit score. He is a Japanese American but moved to Japan right after college so he does not have a credit score. This is stopping him from investing in the US.

What does it take to get a mortgage without a credit score?

Thanks in advance!

Shu

Yes. There is a Foreign National DSCR program available. LTV is relatively low though 60-70% and rates are pretty high. No U.S. or Foreign Credit needed.

[Jessica Zhang]

Hi Shu, Yes. We have programs designed for foreign investors. No credit score, no US income required. You qualify on the perspective rental income. I can give you detailed information and a rate quote.