FHA Mortgages

• People who can't qualify for a traditional bank loan can often qualify for a mortgage backed by the Federal Housing Administration. FHA loans tend to have less-stringent qualifying requirements. For example, a foreclosure or car repossession in recent years won't automatically disqualify you, nor will a less-than-stellar credit score. The other good thing about FHA loans is that they come with pretty low interest rates and down payments, so you don't need a hefty sum of money for your down payment. The bad thing is that you'll need to document everything.
  
  

Bad-Credit Loans

• The sub-prime lending market took a huge hit when the housing market in the U.S. crashed in the mid- to late 2000s. However, that doesn't mean that there are absolutely no lenders out there making home loans to people with bad credit. A mortgage broker can help you find a lender who will accept a marred credit history or stated income. However, be prepared to come up with more money on a down payment and pay a higher interest rate.
  
  

Hard Money Loans

• Hard money loans are scarce but they do exist. These are loans made to you by private investors. However, be prepared to pay. Hard money lenders often require hefty down payments -- of 20 percent or more of a home's value -- and very high interest rates (e.g., 10 percent or more). These loans are designed to help you purchase a home now, clean up your score within a few years and then refinance into a traditional mortgage. Mortgage brokers are often in touch with individual investors making hard money loans. The Internet, too, can help you find a hard money lender.
  
  

Owner Financing

• Perhaps even less common is owner financing, in which the person selling a property agrees to act as the bank. Options such as rent-to-own or rent-to-buy also fall into this category. Usually, the buyer pays the owner a set amount in rent and another set amount to go toward a down payment, with the agreement that the buyer will acquire his own financing by a specified date. Sometimes, people who have had their homes on the market unsuccessfully and own them outright will agree to this agreement; the key is to ask.