Where do low income poor credit get help?

badmomma · #1 01-11-2011, 07:43 PM

Where do people who have low incomes and poor credit get help to purchase their first homes.

Alot of people are in the position to pay rent and never miss a month. Lots of them are paying rents that are higher than mortgage payments would be.

They can't seem to get help however as everyone wants good credit before they will help you.

I want to know if there are any programs out there that will help. I have a daughter who desperately needs to get into her own place and can not get help anywhere.

If you have any information it would be greatly appreciated. I have looked and looked and can't find anything. We live in michigan if that will help at all.

flip_it_fast · #2 01-12-2011, 01:36 AM

I really don't know what she could do. Has she established credit at all? If not it would really help her to actually get a couple of credit cards or better yet a couple of different types of credit. She could have one credit card, some kind of revolving account and even her rent payments will help. It's a good idea to have a mix.

As for applying for some sort of aid I honestly just don't know. I know in Ohio they have a program called HUD that helps families get a house but I don't know the details.

flippinout · #3 01-12-2011, 05:54 AM

Have her check with the USDA, Rural Development
4300 Goodfellow Boulevard
Building 105E FC-252
St. Louis, MO 63120-1703

This is for people who cant otherwise afford safe and sanitary housing for their families.

Have her write them or call them for an application and go from there.

Or try HUD. They may have homes in your area for sale, and may be able to help.

badmomma · #4 01-12-2011, 10:27 PM

She had tried HUD and was refused. They don't have a credit history other that some medical bills.

It just doesn't seem right that you have to jump through hoops to get a little help.

She has always paid her rent on time and that should count for something but its not enough.

As far as the credit cards go they haven't had any luck getting one. They will keep trying and keep looking and hopefully will catch a break soon.

realestatehound · #5 01-23-2011, 01:04 AM

Hey Badmoma this is what my lender tells people who have low credit scores. Get a couple credit cards and charge small amounts on them each month and pay them off when the bill comes in. After a few month's they will raise the limit on the card and each time they raise the limit their card theri credit score will go up. You are correct they can use utilities, rent car payments and so on at least here in Ky. The 2 loans that I use the most is rural housing and Ky. housing. Ky. housing is the only 100% loan still available here in Ky. With Ky. Housing the will provide DAP funds (down payment assistance progran) which will pay up to 4% of the purchase price, then I build the closing cost into the sale price and all the buyer has to come out of pocket with is $350 for the appraisal and $275 for the home inspection and termite inspection. They also add to the monthly payment their home owners insurance and Taxes and put these in a escrowe fund so the lender can pay them at the end of the year. I really love this program for 1st. time home buyers. Hope this helps your friend.

flippinout · #6 01-24-2011, 01:10 AM

Thank you so much realestatehound for the additional information.

It is good to know all the options that are out there for first time buyers and especially good that you have shared with them how to get their credit score higher which will help when they do apply for a loan.

It seems that the credit card option is the best way to go when it comes to building your credit.

realestatehound · #7 01-27-2011, 01:18 AM

The lender that I use for my buyers is one of my best friends and he stays up to date on everything in the lending end of my business. I trust him completely as I know that he would never intentionally give anyone bad advice. Please understand that things might be different in other states.

houseflip101 · #8 01-27-2011, 08:38 PM

how dose one with poor credit even get approved for a credit card to even establish credit don't u have to have credit to get credit and if their income is too low how dose that work and how long dose this take before it even shows that they can purchase the home or car or what ever they are buying It dose seem to be alot of options out there but do they work for every one on a low income bases

flip_it_fast · #9 01-28-2011, 01:44 AM

I started out with poor credit. My sister-in-law (when she was a teenager) used my name to get CD's from Columbia House years ago. Well she never paid for them and I didn't find out about it until years later! It really did hurt my credit.

Here is how I built my credit. I got a credit card with a really small limit. It was through my bank actually. I would use it to make a few purchases a month and pay the entire balance off each month. Before I knew it my credit score was improving and they raised my limit. I got this card when I was only making minimum wage working part-time.

Once I got my credit built up I went and bought my kids a four wheeler. I was able to get credit through a bank that deals with Honda. Now don't get me wrong. It cost me an arm and a leg with interest and insurance and all of that but I did it to help my credit. The total cost of the 4-wheeler plus two types of insurance and interest was over $5,000. I paid no less than $150 each month and paid huge chunks of it down with my income tax returns. I paid it off in two years. That boosted my credit up almost to the top. Now I have great credit.

You don't have to have credit to get credit. Otherwise a lot of people wouldn't have credit. Not everyone has someone to co-sign for them. You just have to start out small and have an income. Apply for a credit card with a $500 limit or something. Anything little to get it started. Make the payments on time and ALWAYS pay more than the minimum.