Evictions are stressful events, and there is no getting around the mental and financial hardships involved. An eviction can impact your life for years into the future and even influence your credit score. Some people wonder if they can get an FHA loan with an eviction. So, can an eviction stop you from buying a house?
If I’ve Had an Eviction, Can I Still Get an FHA Loan?
Yes. It is possible to get an FHA loan in Louisiana, even after an eviction. Unlike traditional loans, Federal Housing Administration loans provide more flexibility, allowing for lenient credit score requirements and lower down payments. Still, an eviction can make things a bit more challenging.
You can improve your chances by getting organized and helping lenders see your overall creditworthiness. Document and be prepared to explain the circumstances of the eviction, as well as the steps you have taken to improve your financial situation since.
It is especially helpful to show a positive rental history during the time after your eviction. Managing your finances responsibly, maintaining steady employment, and undergoing financial counseling can all benefit you.
The bottom line is that you can still qualify for an FHA loan by taking steps to show you are no longer a financial risk.
Does Eviction Affect Your Credit Score?
The eviction itself will not affect your credit score, and should not show up on your credit report. However, the circumstances of and resulting from your eviction might.
Anything that gets reported to credit bureaus can impact your credit score. Most notably, this includes:
- Court judgments: If your landlord files a civil suit for back rent or other issues and wins, it will appear on your credit report.
- Debt collection: Having your debt turned over to a collection agency is one of the most damaging things that can show up on your credit report.
Bad credit can impact your life in many negative ways, and can make the process of obtaining a home loan difficult. The most straight-forward way to resolve this problem is to settle your debts as soon as possible, and in doing so, you may be able to have them removed from your credit report.
If that isn’t reasonable, consider undergoing financial counseling, which helps you improve your situation and shows future lenders that you are taking steps to better your credit worthiness.
How to Finance a Home With Bad Credit
Bad credit does not necessarily bar you from financing a home, and FHA loans are among the best options for home buyers with poor credit scores.
Veterans have additional opportunities with VA loans, and people in rural areas may take advantage of USDA loans. Both have lower credit score requirements, and neither requires a down payment.
Subprime lenders are another avenue for people with poor credit, though you’ll want to proceed with caution as interest rates can be significantly higher.
Yes, You Can Get an FHA Loan After an Eviction
This article started out asking if you can get an FHA loan with an eviction. While the answer is a definite yes, as you can see, there is a lot to consider here. It is smart to reach out to a knowledgeable real estate agent who can help with your specific situation.
Contact us at Home Helpers Properties to find out how we can assist with financing your home, even if you have bad credit.