Government-backed mortgage loans — FHA, VA and USDA programs — typically require credit scores higher than 580 and down payments from 0% to 3.5%. Since conventional loans are riskier for lenders, most require credit scores of 620 and 5% to 20% down payments.
Those with credit scores below 580 can still qualify for an FHA loan if they can make a 10% down payment.
Banks sometimes have stricter eligibility requirements, so riskier applicants typically get a better deal from a mortgage company. If you have bad credit, you may not be eligible for a conventional mortgage through a bank. Mortgage companies often work with a vast network of lenders, so they can provide more options that cater to homebuyers with low credit scores or higher debt-to-income ratios. You might also consider a local credit union.