No, but beware! Traditional loans are going to continue to require more money down and FICO scores of 700-750 plus. In these recent and continuing times of economic chaos, how many people have not had some sort of "ding" on their credit? Jobs and pensions have been lost. Stock portfolios have been devastated. At least forty six million Americans are uninsured. Medical costs have bankrupted people or put them into "collections"......even some of those who actually do have insurance. While luxuries are being eliminated from our lives, gas, energy, and grocery costs are rising. If you haven't fallen victim to one of the catastrophes mentioned above, then perhaps some other equally bad or unavoidable situations have trashed your credit rating.

So what options are out there for those wanting to buy a home? There are some options, but it depends on exactly how bad your credit actually is. Lenders will tell you to repair your credit rating before you buy. That is sound advice, but it will not help you NOW. Right now, with full documentation, there are some great loans through FHA. Some require only 3-5% down payments. You would need to talk to a Lender who specializes in FHA to find out if they have a loan that would work for you. FHA is typically looking for steady income and a FICO score of around 550, depending on your area. If you are a Senior Citizen of 62 years of age or older, then you are really in luck. FHA insures a government backed program that is a type of reverse mortgage called a HEMC, which stands for home equity mortgage conversion. This can be used to get equity out of your current home that you don't "qualify" to refinance or get a second mortgage on. Even better, if you are 62 or older, have no home, but you do have cash, EVEN IF YOU HAVE NO INCOME AND BAD CREDIT, you can BUY a home through this program so long as you have the required downpayment. It is a complex program and not for everyone, but if you don't have any other choices it can be a lifesaver. Absolutely do not deal with any reverse mortgage lenders who are not HUD approved.

There is also always some Seller Financing out there, probably more now than ever before. They don't WANT to finance those with bad credit, but with enough cash down and a higher interest rate you might have a chance. A letter to the Sellers submitted with a purchase contract explaining "how" your credit got "bad" can often help. If it's You or Nobody, they might choose you.

Finally, there are "hard money lenders". Consider them the Loan Sharks of Mortgage Lending. With a BIG downpayment, they may graciously grant you a mortgage at an interest rate of somewhere between 18-26%. plus or minus and 3-5 discount points or more. If this is your only option, RUN quickly and rent until your situation changes.