Recent Credit Event Loans
What Are Recent Credit Event Loans?
If you have a recent event that has damaged your credit score, it can be difficult to secure a loan. And even if you can borrow, the interest rate will typically be much higher due to the event. There are ways to get around a poor credit score due to a bad event, however; “bad credit home loans” can be made in different ways.
Can You Buy a House if You Have Bad Credit?
Yes, although bad financial events like a foreclosure or declaring bankruptcy can damage your credit score, there are still ways to buy a home. If your credit score is below 550, your options might be severely reduced from traditional lending options. If you can secure a loan, it often comes with higher interest rates or unreasonable terms for repayment. A recent credit event loan is one where the lender looks past one poor event to determine a person’s eligibility.
What Qualifies as a Recent Credit Event?
- Short sale, deed in lieu, or foreclosure
- Filing for bankruptcy
- Restructuring debt
- Defaulting on a payment
- Obligation acceleration
- Moratorium/repudiation or refusing to honor terms of an agreement
- Defaulting on a loan
When you have a bad financial event in your history, it can lead to paying higher loan rates, the requirement of large down payments, or extra fees. A credit score of less than 680 usually affects your lending eligibility. Many lenders will consider you a higher risk and will make it more difficult for you to obtain a loan.
There are ways to obtain a home loan even if you have a poor credit score. Non-traditional lenders, like HomeSpring, believe that one bad event should not stop you from your dream of homeownership.
We look past one recent event to see a bigger picture of reliability in repayment and seek solutions to help you obtain a loan for your client.
Recent Credit Event Loans FAQ
A Recent Credit Event Loan is a mortgage option designed to help homebuyers who have had a recent credit issue—like a foreclosure, short sale, bankruptcy, or loan modification—qualify for a new mortgage sooner than with traditional financing. These loans consider the context of the credit event rather than excluding applicants outright.
Borrowers who’ve experienced qualifying events such as a foreclosure, short sale, deed‑in‑lieu of foreclosure, bankruptcy, or recent credit derogatory history may be eligible, provided they meet other income, assets, and stability requirements.
Unlike traditional lenders that may require a long waiting period, HomeSpring’s Recent Credit Event programs can sometimes consider you for financing sooner than standard waiting times, depending on the type of credit event and overall profile.
Interest rates can be slightly higher than those for standard conforming loans, depending on credit history and risk profile. However, they’re structured to balance accessibility with responsible underwriting, offering a path to homeownership when conventional loans may not be available.
These loans typically support primary residences and may extend to condos and certain multi‑unit properties, depending on the program and underwriting guidelines.
Down payment requirements vary by program. Some Recent Credit Event Loans allow low down payment options, and HomeSpring can help you explore the best fit based on your financial profile.
While both are options for borrowers with past credit challenges, Recent Credit Event Loans are typically underwritten with income and asset verification and focus on the reason behind the credit event, rather than labeling you as a high‑risk borrower without context.
Eligibility after a bankruptcy depends on the type of bankruptcy and how long ago it was discharged. HomeSpring Mortgage will evaluate your entire financial profile—including current income and payment history—to determine your qualification.
You’ll need standard mortgage paperwork (e.g., income verification, assets, government ID) plus documentation of the credit event (discharge papers, foreclosure notice, short sale closure letter). Your loan officer will guide you through exactly what’s needed.
In many cases, if you experienced a recent credit event and your financial situation has stabilized, refinancing into a Recent Credit Event Loan may help you secure better terms and rebuild credit. Eligibility depends on current ratios and property details.
These mortgage loan programs are designed to help borrowers with recent credit challenges, so a lower credit score—if paired with high income, stability, and explanation of the credit event—can still qualify you for financing.
Timing can vary, but working with a knowledgeable loan officer helps streamline documentation and underwriting—often resulting in a faster, more transparent approval process than qualifying with traditional lenders.
Making timely mortgage payments on a Recent Credit Event Loan can be an effective way to rebuild and improve your credit score over time, demonstrating strong financial responsibility post‑event.