Unusual Owner-occupied scenario

[Jeff Anderson]

I have a bit of an unusual scenario... My wife and I own our home free and clear with no mortgage (reside in Ohio). We are looking for a loan of $150K to pay off unsecured debt that has fallen into various stages of collections/delinquency. Our combined annual income is approximately $75K, and both of our credit scores are right around 500, due to the delinquent unsecured debt. As I stated up front, we do own our home free and clear, and I estimate it to be worth anywhere between $275K-325K, depending on how conservative an appraisal might be.

So my question is, given the equity in our home and despite the terrible credit scores, are there any loan options us? We would be looking to carry this loan for 12-36 months while we repair our credit, then refinance to a traditional mortgage hopefully with higher FICOs.

Curious to hear any and all thoughts. Thanks in advance.