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    Bad Credit and Home Ownership: Can They Go Together?

    Louisville is filled to the brim with hometown hospitality, yet it features larger city amenities. It has been called the “most livable” city in the southeast of Kentucky and Indiana. Louisville believes in fostering a healthy business environment and improving the quality of residential living for its residents. If you have bad credit and thought you could never own a home in Louisville, there is still good news.  There must be several things to consider, but you can still own a home.

    Photo by, Chris Potter
    Photo by, Chris Potter

    Bad Credit, Home Ownership With “HUD”

    The basic housing options are to pay a large down payment or pay a higher interest rate. Louisville believes in helping everyone become a homeowner. The city’s Department of Housing and Urban Development (HUD) can qualify people with bad credit for affordable housing at below market price, assistance with down payments and assistance with closing costs. Keep in mind, however, that the lower purchase price for homes, through HUD, are marketed “as is,” which means the properties may require repairs.

    Cosigner for a New Home

    Your first home can also be achieved through a cosigner. Louisville supports cases where a cosigner, whose credit and finances are stable, can qualify people with bad credit, to secure a home loan. Yes, cosigning for someone with bad credit, is a credit risk and there are some states who state that cosigners must be a family member or a spouse. Just because a person becomes a cosigner, it does not give them clear title to the property and therefore, they have no legal claim. However, if it were a perfect world and you could easily get a cosigner, then both the borrower and their cosigner should shop carefully for the best mortgage rates. If the potential homeowner’s credit ratting should improve, they have the option to refinance the loan and remove the cosigner’s name from the mortgage.

    Louisville Housing Corporation

    First time homeowners trying to achieve a home mortgage loan can turn to Louisville’s Kentucky Housing Corporation. The Kentucky Housing Corporation is designed to provide low interest loans for down payment for first time home buyers, even though they may have bad credit. They offer varied programs for first time home buyers, including HUD programs. Kentucky’s Rural Housing Service Single Family Loans Programs offers people with bad credit and low income families, loans made up of 100% of the appraised value with negotiable interest rates, but they are generally between 1% to 6%. The only requirement for potential homeowners, is that they must build or occupy a home, within the rural areas of Louisville and the entire Kentucky area. Under the Kentucky Housing Corporation programs, the City of Louisville guarantees the loan through the Rural Housing Service and local banking partners.

    Louisville – Rent to Own

    Another interesting Louisville program, in becoming a homeowner with bad credit, is the “lease” option. The lease option allows you to rent the property, but paying rent to purchase the home as soon as possible. The potential buyer is guaranteed a set price within a certain amount of time and during the rental period, a portion of their rent payment is applied to the buyout price of the home. Entering this type of “lease” or rental program, will require a person to put a lot of money down on the down payment. The leased property is also the responsibility of the renter, who must maintain the condition of the property and they must be able to buy the property when the agreed upon time frame is over.

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