HRRC offers classes for prospective home buyers who have less than perfect credit

Low credit scores or lack of credit often prevent the purchase of a home. Many people with low credit scores assume they can never buy a home and instead turn to renting.

Before deciding that home ownership is not possible, it is a good idea to investigate what credit requirements are necessary and order a credit report to discover ways to improve a credit score. A free credit report can be obtained online at many sites, including www.annualcreditreport.com and www.creditkarma.com.

Prospective homebuyers with less than perfect credit may qualify for a Federal Housing Administration (FHA) mortgage, which are insured by the U.S. Department of Housing and Urban Development. Because lenders have less risk with these mortgages, requirements are not as restrictive as conventional loans.

Borrowers are eligible for a maximum FHA mortgage with a credit score of 585 or higher and a 3.5 percent down payment. However, many lenders who offer FHA mortgages raise the credit score requirement to 620 or higher. Prospective homebuyers should work to improve credit scores before submitting a loan application so scores are not obstacles to home purchasing.

Those who have foreclosures on their credit reports may also be able to purchase a home. FHA requires a minimum of three years since completion of the action, and good credit must be reestablished. Delinquent federal debt or federal liens must be current, paid, or on a satisfactory repayment plan.

The Home Buyer Education Program through the Home Repair Resource Center (HRRC) provides information on improving credit, raising credit scores and managing debt. Classes are held monthly at the Lee Road Library. Visit www.hrrc-ch.org for a class schedule, or call 216-381-6100, ext. 13, for more information.