Getting FHA loan with low credit score.

[Barbara Hudson]

I am an ambitious young woman 32 who is looking to invest in a first time home purchase. I would like to go with a multifamily home and would get an FHA loan. My credit is between 540 and 560 which is close to the 580 minimum it would take to be approved for the 3.5 percent down payment but not close enough. I am in a position to put quite a bit down on the property but have other bills that would make putting down a lot of money as being a risk. Any thoughts?

[Mindy Jensen]

Welcome to BiggerPockets, @Barbara Hudson.

Your low credit score will be a hindrance in getting a loan. While you are searching for your property, make it a priority to raise it. 

On-time payments make up 35% of your score, and low debt-to-credit ratio kicks in another 30%. If you carry high balances, work to get those paid down. Lenders like to see that in the 20-30% range.