How to Buy a Home After Rental Hardship and Rebuild Hope

Buying a home can feel out of reach when you’ve struggled with rent in the past. Maybe you fell behind during the pandemic, lost a job, got hit with an eviction case, or had rent go to collections. If that’s your story, you might be wondering if homeownership is still possible for you.

The truth is, you can learn how to buy a home after rental hardship and still become a successful homeowner. It takes time, planning, and the proper guidance, but your past does not have to control your future. This guide will show you how to buy a home after facing challenges with renting. It provides easy steps and clear actions to help you through the process.

Key Takeaways: How to Buy a Home After Rental Hardship

• You can still qualify for a mortgage even if you had late rent, collections, or an eviction, as long as you show that your situation has improved.
• A significant part of buying a home after experiencing rental hardship is resolving outstanding landlord debts, collections, and judgments, and maintaining proof of any settlements or payments.
• Lenders focus heavily on your recent payment history, especially the last 12–24 months, so on-time rent and bill payments now are more important than old mistakes.
• Saving money for a down payment and extra funds shows lenders that you can manage a mortgage payment, even if you have faced difficulties with rent in the past.
• FHA, VA, conventional, and non-QM loans all have different rules, so choosing the right loan program is crucial when planning to buy a home after experiencing rental hardship.
• Working with a lender who understands rental hardship can help you build a clear game plan, even if you are not ready to buy a home today.

If you struggled to pay rent during tough times, you are not alone. Many renters fell behind during the COVID-19 pandemic and in the years that followed, as rents, prices, and inflation increased. Even today, people are still dealing with past-due rent, collection accounts, and eviction records from the past.

The good news?

You can learn how to buy a home after rental hardship. It takes planning, cleanup work, and the right lender, but it is absolutely possible.

In this guide, we’ll walk through how to buy a home after rental hardship step by step, so you can go from “stuck in rent trouble” to “ready to be a homeowner.”

What Is Rental Hardship?

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Before we talk about how to buy a home after rental hardship, let’s define what “rental hardship” really means.

You may have had rental hardship if:

• You fell behind on rent or skipped payments.
• Your landlord sent your unpaid rent to collections.
• You received an eviction notice, or an eviction was processed through the court.
• You had to move out quickly because you couldn’t pay.
• You needed help from rental assistance programs or charities.

During the COVID-19 pandemic, millions of renters experienced rental hardship. There were eviction bans and emergency rental aid programs, like the Emergency Rental Assistance (ERA) program. Those big federal programs have now ended, and renters must look to local help instead.

Even though the pandemic is no longer “breaking news,” its after-effects are still on many people’s credit reports and court records. That is why learning how to buy a home after rental hardship is so important today.

Does Rental Hardship Stop You From Buying a Home?

Here’s the simple truth:

• Rental hardship does not automatically block you from getting a mortgage.
• But it can slow you down or make approval harder if:
  • You have unpaid judgments from an old landlord.
  • Your past-due rent has been reported to a collection agency, which will appear on your credit report.
  • You had a recent eviction, bankruptcy, or other serious credit issue.

Most of the time:

• An eviction does not show up directly as “eviction” on your credit report.
• If your landlord takes you to court and wins, or sends your unpaid rent to collections, that debt will show up on your record. It can significantly impact your credit score and make it more difficult to obtain a home loan.

So, when we talk about how to buy a home after rental hardship, we are really talking about:

1. Cleaning up debts and court issues from the rental hardship.
2. Rebuilding your credit and payment history.
3. Showing a lender that you can handle a house payment today, even if you had trouble in the past.

Does Rental Hardship Stop You From Buying a Home?

Here’s the simple truth:

• Rental hardship does not automatically block you from getting a mortgage.
• But it can slow you down or make approval harder if:
  • You have unpaid judgments from an old landlord.
  • Your overdue rent has been sent to a collections agency, which will be reflected on your credit report.
  • You had a recent eviction, bankruptcy, or other serious credit issue.

Most of the time:

• An eviction does not show up directly as “eviction” on your credit report.
• If your landlord takes you to court and wins, or sends your unpaid rent to collections, that debt will show up on your record. Your credit rating can decline considerably, which may complicate your ability to secure a mortgage.

So, when we talk about how to buy a home after rental hardship, we are really talking about:

1. Cleaning up debts and court issues from the rental hardship.
2. Rebuilding your credit and payment history.
3. Showing a lender that you can handle a house payment today, even if you had trouble in the past.

1. Clean Up Past-Due Rent, Collections, and Judgments

A big part of how to buy a home after rental hardship is dealing with leftover damage.

Talk to Old Landlords and Collection Agencies

If you still owe money:

• Ask about a settlement (for example, paying less than the full balance in a lump sum).
• Ask if they will update the credit report to “paid in full” or “settled” once you have made the payment.
• Get any agreement in writing before you send money.

Some lenders will want all judgments and certain collections (especially housing-related) to be paid off before closing. Clearing these now makes the process smoother later.

Keep Proof of Payment

When you are working through how to buy a home after rental hardship, keep a folder (paper or digital) with:

• Settlement letters
• Payment receipts
• Copies of cashier’s checks or bank statements
• Court papers showing a judgment was satisfied, vacated, or dismissed

You can share this with your loan officer when you apply for a mortgage. It shows that, even though you had hardship, you took responsibility and cleaned it up.

2. Rebuild Your Credit After Rental Hardship

You do not need perfect credit to learn how to buy a home after rental hardship. However, you do need stable and improved credit.

Here are simple, day-to-day steps:

• Pay every bill on time, even if it is just the minimum.
• If you have credit cards, try to keep balances under about 30% of the limit.
• If you have a short credit history, think about utilizing a secured credit card or obtaining a credit-building loan.
• Do not open a lot of new accounts at once.

Over time, on-time payments will matter more than old mistakes. Many lenders focus heavily on the last 12–24 months of your credit history when deciding if you’re ready to buy again.

If your rental hardship led to bankruptcy, foreclosure, or short sale, there may be specific waiting periods before you can get a conventional loan (Fannie Mae / Freddie Mac). For example, foreclosures often require a seven-year waiting period for conventional loans, with some shorter options if you can prove extenuating circumstances.

Your loan officer can explain what this means for you personally as you plan how to buy a home after rental hardship.

3. Prove You Can Handle a House Payment

Even after experiencing rental hardship, lenders want to see that you can now manage your housing costs effectively.

Show Strong Rental History Now

If you are renting today:

• Make sure your current rent is paid on time every month.
• Pay by check, online, or bank transfer so there is a clear record.
• Avoid paying in cash if there is no receipt.

Lenders love to see 12 months of on-time rent. It tells them you are ready for a mortgage payment. For some borrowers, lenders will even try to use bank statements or canceled checks to verify rent if your landlord does not report it.

This step is key in how to buy a home after rental hardship: you are showing that the hardship is behind you, and your current habits are strong.

Build Savings for Down Payment and Reserves

Lenders also like to see savings:

• Money for a down payment
• Money for closing costs
• Extra reserves (a few months of payments in the bank)

Even if you use a low down payment program, a cushion helps. It shows that if something happens, you can still make your mortgage payment.

4. Choose the Right Loan Program After Rental Hardship

Not all loans look at your past the same way. Understanding loan types is a big part of how to buy a home after rental hardship.

FHA Loans

FHA loans are available to individuals with lower credit scores or those who have experienced credit issues in the past. They are more lenient about old debts, especially if those debts are not very large. The primary focus is on your financial situation over the last 12 to 24 months and whether you can make your payments as they are due. If you’ve faced difficulties with rent and this has impacted your credit score, an FHA loan could be a great option for you, especially once you’ve been able to keep up with your rent and other bills for a while.

VA Loans (for Eligible Veterans and Active Duty)

VA loans are a great option for veterans and active-duty service members who want to purchase a home, especially if they’ve faced financial challenges in the past but have since regained financial stability. One of the benefits of these loans is that you typically don’t need a down payment, making the home-buying process simpler. If you’ve served in the military and want to stop renting, a VA loan might be just what you need.

Conventional Loans (Fannie Mae / Freddie Mac)

Conventional loans, which are backed by Fannie Mae and Freddie Mac, typically require borrowers to have higher credit scores. If you’ve had major financial problems in the past, such as a foreclosure, the rules may be stricter for you. However, if your past issues were primarily related to rent and collections that you’ve since resolved, you may be eligible for a loan after some time has passed.

Non-QM Loans

Non-QM loans, or non-qualified mortgage loans, are special types of mortgages that have more flexible rules. They may consider factors such as your income from bank statements, any recent credit issues, or other unique circumstances. These loans can be helpful for people looking to buy a home after struggling with renting. However, interest rates are usually higher, and you may need a larger down payment. Non-QM loans are often best used as a temporary solution until your credit improves, making you eligible for a standard FHA or conventional loan later.

5. Write Your Hardship Story

Numbers matter, but so does your story.

When you sit down with a loan officer to talk about how to buy a home after rental hardship, it helps to have a short, honest explanation:

• What caused the hardship? (Job loss, illness, pandemic shutdown, divorce, etc.)
• When did it start and when did it end?
• How did you fix it? (New job, payment plans, settlements.)
• What has changed so that it will not happen again?

Keep it simple and true. Many underwriting guidelines allow for extenuating circumstances when there was a one-time event outside your control, and you have now recovered.

Your written story, plus proof (job offer letters, medical bills, settlement papers), can make a real difference as you work on how to buy a home after rental hardship.

6. Work With a Lender Who Understands Rental Hardship

Not every lender treats rental hardship the same way. Some have extra “overlays” and may say no even if you technically meet program rules. Others are more experienced with:

• Past evictions
• Rental collections
• Low or rebuilding credit
• Non-QM and flexible programs

When you are learning how to buy a home after rental hardship, you want a lender who:

• Looks at your whole story, not just a score.
• Knows how to work with manual underwriting if needed.
• Can suggest the best path: FHA, VA, conventional, or non-QM.
• Helps you create a plan and timeline if you are not quite ready yet.

Learning how to buy a home after rental hardship is not about having a perfect past. It’s about proving that today, you are stable, responsible, and ready for the next step. With the right plan, the right cleanup work, and the right lender, your rental struggles can become part of your story—not the end of it.

Borrowers who need a five-star national mortgage company licensed in 50 states with no overlays and who are experts on how to buy a home after rental hardship, please contact us at 800-900-8569, text us for a faster response, or email us at alex@gustancho.com.

Frequently Asked Questions About How to Buy a Home After Rental Hardship:

Can I Still Get a Mortgage if I was Evicted?

Yes, you can often still get a mortgage after an eviction. The key to how to buy a home after rental hardship is what shows on your credit and in court records. If there is a judgment or collection from the eviction, you may need to pay it off or settle it before closing, or your lender may have to treat it as a debt in your approval.

How Long Should I Wait After Rental Hardship Before I Apply?

There is no single rule, but a common path in how to buy a home after rental hardship is:

• Get at least 12 months of on-time rent and bill payments.
• Clean up or settle any housing-related collections or judgments.
• Build some savings.

Some borrowers may be ready in a year; others may need longer, depending on how serious the hardship was.

Do I have to Pay Off Old Landlord Debt to Buy a Home?

Sometimes yes, sometimes no. When planning how to buy a home after rental hardship, remember:

• Many lenders will require judgments to be paid off.
• Some will want larger recent housing-related collections handled before closing.
• Smaller, older collections may be allowed to stay, depending on the loan type.

A good loan officer can look at your exact credit report and guide you.

Will My Rental Hardship Lower My Credit Score Forever?

No. Credit scores change over time. A big piece of how to buy a home after rental hardship is rebuilding your score by:

• Paying on time
• Keeping balances low
• Avoiding new negative marks

As time passes, old marks matter less, especially if you show strong recent history.

Can I Buy a Home After Rental Hardship if I Don’t have a Big Down Payment?

Yes. Many people learning how to buy a home after rental hardship use:

• FHA loans with low down payments
• VA loans (for those who qualify) with no down payment
• Down payment assistance programs in some states and cities

You still need to show you can handle the monthly payment and closing costs.

Does the End of the COVID Rental Aid Mean I Cannot Buy a Home?

No. Federal emergency rental programs, such as ERA, have mostly wound down, but that does not prevent you from buying. U.S. Department of the Treasury+1

What matters most for how to buy a home after rental hardship now is:

• Your current income
• Your current payment history
• How you’ve handled any old rental debts

What if My Rental Hardship Came with a Job Loss?

Job loss was common during and after the pandemic. When working on how to buy a home after rental hardship, lenders will want to see:

• You are back to work (or self-employed with stable income).
• Your income is likely to continue.
• Your recent work history aligns with the program’s requirements.

Many people now have job gaps on their records. As long as you are stable today, that doesn’t automatically stop you.

Can Non-QM Loans Help Me Buy After Rental Hardship?

Yes, non-QM loans can help people buy sooner while they are still recovering from the full impact of rental hardship. As part of how to buy a home after rental hardship, non-QM can be a bridge option if:

• You have recent credit issues, but a strong income.
• You need to use bank statements instead of tax returns.
• You have a unique income or a short history of self-employment.

You should also consider how and when you’ll refinance into a standard loan later.

Will a Past Rental Hardship Stop Me from Ever Owning a Home?

No. Learning how to buy a home after rental hardship is all about:

• Cleaning up what you can
• Showing strong, stable habits now
• Choosing the right loan program and lender

Millions of people have gone from rental hardship to homeownership. It may take time, but it is very possible.

What’s the Very First Step I Should Take?

The first step in how to buy a home after rental hardship is simple:

1. Pull your credit reports and make a list of every problem item.
2. Check court records for any eviction or landlord judgments.
3. Talk to a lender who understands rental hardship and request a realistic plan.

From there, you’ll know what to fix, how long it may take, and what kind of loan could work for you.

This article about “How to Buy a Home After Rental Hardship and Rebuild Hope” was updated on November 17th, 2025.