The Best Bad Credit Mortgage Lenders In Delaware

The Best Bad Credit Mortgage Lenders in Delaware (2025 Update)

It can seem overwhelming if you have bad credit and want to buy a home in Delaware. But you’re not alone! Many people believe bad credit means they can’t get a mortgage, but that’s not true. The good news is that you have options! Finding the right mortgage lenders who can work with your situation is possible.

In this guide, we’ll help you discover the best options for bad credit mortgages in Delaware, plus show you how to get approved, with a bit of help from Gustan Cho Associates.

What Makes a Bad Credit Mortgage Lender “The Best” in Delaware?

The best bad credit mortgage lenders in Delaware do more than offer loans. They look at the full picture: your story, your goals, and your ability to make payments, even if your credit score is low.

When searching for a lender, several key factors must be considered. Look for flexible credit score requirements, as some lenders accept scores as low as 500. It’s also important to find lenders who do not impose additional overlays on top of FHA, VA, or USDA guidelines.

Experience with managing challenging financial situations, such as bankruptcies, judgments, or late payments, is another crucial aspect to evaluate. Lastly, prioritize lenders known for fast closings and effective communication to ensure a smooth borrowing process.

That’s exactly why Gustan Cho Associates is recognized as one of the best bad credit mortgage lenders in Delaware.

Why Is It Important to Find the Right Lender With Bad Credit?

Not all lenders are created equal. Many banks and credit unions deny people with bad credit, even if FHA, VA, or other government programs allow approval.

Here’s what can happen if you choose the wrong lender:

• Your file may get denied because of lender overlays
• You could waste time and money on appraisals or inspections
• You might not be told about all your loan options

The best bad credit mortgage lenders in Delaware will look for ways to say “yes” when others say “no.” That’s what sets Gustan Cho Associates apart.

Who Are Bad Credit Mortgage Lenders Helping in Delaware?

If you’re wondering whether you fit the profile for bad credit mortgage help, here are common borrower situations we see in Delaware:

• Credit scores as low as 500 FICO
• Past bankruptcies, foreclosures, and short sales
• Recent late payments
• Large amounts of collections or charge-offs
• Judgments or tax liens
• Limited work history or gaps in employment
• Self-employed with non-traditional income
• ITIN borrowers or foreign nationals

If any of these sound like you, you’re the kind of borrower we help daily at Gustan Cho Associates.

Mortgage Options for Bad Credit Borrowers in Delaware

The best bad credit mortgage lenders in Delaware should offer various loan programs. That way, you’re not boxed into one option. Here’s what’s available in 2025:

1. FHA Loans

FHA loans are a solid option for first-time homebuyers since they have flexible credit score requirements. You can get approved with a credit score as low as 500 if you’re willing to put down 10%, or a 3.5% downpayment with a 580 credit score. Plus, they allow manual underwriting, which can help those with unique situations and boost their chances of getting approved.

2. VA Loans

VA loans are a great choice for veterans and active-duty military folks. A major perk is that the VA doesn’t set a minimum credit score, although some lenders might look for a score of 580 or above. Plus, you don’t have to worry about a down payment, which makes getting into a home way easier for those who’ve served. Overall, VA loans help veterans and active-duty members make their homeownership dreams come true.

3. USDA Loans

USDA loans are great because you don’t need to put any money down if you buy a place in certain rural areas. Just keep in mind that there are some income limits and location restrictions you’ll need to follow.

4. Non-QM Loans (Alternative Loans)

Non-QM or alternative loans provide different financing choices for folks who don’t fit the usual lending criteria. One option is bank statement loans, which are great for self-employed people. There are also no-doc and stated income loans that make it a lot easier to prove how much you make. For real estate investors, debt service coverage ratio (DSCR) loans focus on the income from the property instead of the borrower’s personal income.

Additionally, ITIN loans help non-U.S. citizens without Social Security numbers buy homes using individual taxpayer identification numbers.

At Gustan Cho Associates, we offer all of the above, which is why we’re one of the best bad credit mortgage lenders in Delaware.

Real-Life Loan Approvals With Bad Credit in Delaware

Here are some true stories of borrowers we’ve helped:

• Ashley from Dover had a 524 credit score and two open collections. She got approved for an FHA loan with 10% down and closed in 30 days.
• Mike and Carla in Wilmington were discharged from bankruptcy just 13 months ago. With a strong rental history and steady income, we got them approved on a manual underwrite.
• Jose in Newark is a self-employed barber with no W-2s. We used his 12-month bank statements to get a non-QM loan with just 15% down.

These success stories are why people trust Gustan Cho Associates when looking for the best bad credit mortgage lenders in Delaware.

What About Judgments or Tax Liens?

Many people with bad credit also have open judgments or tax liens. You can still get a mortgage in Delaware.

To qualify with a judgment or lien, it is important to have a written payment agreement in place. Additionally, you must have made at least three on-time payments. It’s worth noting that the judgment or lien can also be settled at the time of closing.

We work with title companies and creditors to make this part as stress-free as possible.

Can You Still Buy a Home After Bankruptcy or Foreclosure?

Yes. The best bad credit mortgage lenders in Delaware understand that FHA and VA guidelines allow:

• FHA: 2 years after Chapter 7, 1 year into Chapter 13 with trustee approval
• VA: 2 years after Chapter 7, 1 year into Chapter 13
• Foreclosure or short sale: 3 years (FHA), 2 years (VA)

At Gustan Cho Associates, we even offer loans with no waiting period for non-QM products.

What If You Don’t Have a Credit Score?

If you lack a traditional credit score, you still have options to secure a loan. In Delaware, we assist borrowers who fall into this category every year by considering alternative methods of assessing creditworthiness. Factors such as rental history, utility bills, and payments for cell phone services or insurance can all be utilized as “alternative tradelines.” These alternatives can be beneficial for manual underwriting, making it possible for those without a conventional credit score to qualify for financial assistance.

Why Choose Gustan Cho Associates in Delaware?

Here’s what makes Gustan Cho Associates one of the best bad credit mortgage lenders in Delaware:

• Licensed in 50 states
• Over 210 wholesale lending partners
• No lender overlays on government loans
• Fast closings, even on tough loans
• We work nights, weekends, and holidays

We don’t give up when others do. We find solutions.

Delaware-Specific Benefits and Local Knowledge

Gustan Cho Associates specializes in Delaware-specific benefits and possesses valuable local knowledge regarding various resources available to residents. They are well-versed in programs offered by the Delaware State Housing Authority (DSHA) for down payment assistance, as well as local tax rules and title practices. Additionally, they are aware of county-specific programs and grant options that can aid potential homebuyers.

With expertise in pairing state-level assistance with bad credit mortgage programs, Gustan Cho Associates is dedicated to helping clients get approved quickly and efficiently.

How to Get Started With a Bad Credit Mortgage in Delaware

Getting started is easy:

1. Reach out by calling 800-900-8569 or emailing gcho@gustancho.com
2. Get pre-approved and go over your credit and income
3. Explore your options with one of our experienced loan officers
4. Start shopping for your new home with confidence

We’ll walk with you every step of the way.

Final Thoughts

Finding the best bad credit mortgage lenders in Delaware doesn’t have to be hard. You need a lender that looks beyond your credit score and sees the whole picture. You need a team that knows all the loan options and won’t say “no” just because another lender did.

Gustan Cho Associates has built its reputation by saying “yes” when others say “no.” That’s why we’re proud to be known as one of the best bad credit mortgage lenders in Delaware.

Borrowers who need a five-star national mortgage company licensed in 50 states with no overlays and who are experts on the best bad credit mortgage lenders in Delaware, please contact us at 800-900-8569, text us for a faster response, or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.

Frequently Asked Questions About The Best Bad Credit Mortgage Lenders in Delaware:

Q: Can I Get a Mortgage in Delaware with Bad Credit?

A: Yes! Even if your credit score is low, you still have options. The best bad credit mortgage lenders in Delaware, like Gustan Cho Associates, can help you qualify, even with a score as low as 500.

Q: What Credit Score do I Need to Buy a Home in Delaware?

A: Some lenders need a 620 score or higher. However, the best bad credit mortgage lenders in Delaware can work with scores as low as 500 if you meet other loan requirements.

Q: Who are the Best Bad Credit Mortgage Lenders in Delaware?

A: The top mortgage lenders for bad credit in Delaware consider your situation rather than focusing solely on your credit score. Gustan Cho Associates is recognized as a top lender because it refrains from adding extra limitations and supports individuals whom other lenders might deny.

Q: What Loan Programs Can Help People with Bad Credit in Delaware?

A: You may qualify for FHA, VA, USDA, or non-QM loans. The best bad credit mortgage lenders in Delaware offer many options so you can find the one that works for you.

Q: Can I Still Get a Home Loan if I had a Bankruptcy?

A: Yes. The best bad credit mortgage lenders in Delaware know that FHA and VA loans allow you to buy after bankruptcy, sometimes after just one year. Gustan Cho Associates also has loans with no waiting period.

Q: What if I Don’t have a Credit Score?

A: That’s okay. You can still get a loan using rental history or bills like your phone or electric bill. The best bad credit mortgage lenders in Delaware know how to work with borrowers who don’t have a score.

Q: Can I Get a Mortgage with a Judgment or Tax Lien?

A: Yes, you can. If you have a payment plan and have made three on-time payments—or if you pay the lien off at closing—the best bad credit mortgage lenders in Delaware can still approve you.

Q: How is Gustan Cho Associates Different from Other Lenders?

A: Gustan Cho Associates has no lender overlays, works with over 210 lenders, and helps people get approved when others say no. That’s why they’re one of the best bad credit mortgage lenders in Delaware.

Q: Do I Need a Big Down Payment with Bad Credit?

A: Not always. FHA loans only need 3.5% down with a 580 score. If your score is lower, you may need 10% down. The best bad credit mortgage lenders in Delaware will explain all your options.

Q: How do I Get Started with a Bad Credit Mortgage in Delaware?

A: Call Gustan Cho Associates at 800-900-8569 or email gcho@gustancho.com. They’ll walk you through everything. They’re among the best bad credit mortgage lenders in Delaware and are open nights and weekends, too.

This blog about “The Best Bad Credit Mortgage Lenders In Delaware” was updated on July 15th, 2025.