This guide covers Sacramento California home purchase with bad credit and credit scores down to 500 FICO. Sacramento is the capital of California and is located in the northern-most point of California’s Central Valley.  Being the sixth-largest city in California, and home to the Sacramento Kings and the Sacramento River Cats, Sacramento is a very desirable place to live.  There are plenty of activities in Sacramento, whether it be kayaking down the beautiful American River, shopping in Old Sacramento, or enjoying a concert at the well-known Cesar Chavez Plaza.  For those that like a nice weekend getaway every now and then, Sacramento is proximal to beautiful Lake Tahoe where visitors can enjoy skiing and boating, dinner cruises on the lake, or fine dining and dancing.

Making a Sacramento California Home Purchase

PurchaSacramento’s historical culture can be re-experienced through its many art and history museums such as the Crocker Art Museum, California State Railroad Museum, and Sutter’s Fort.sing a home in Sacramento, California, with bad credit is challenging but possible, thanks to various loan programs and financial strategies designed to accommodate those with less-than-ideal credit.

Sacramento California Home Purchase With FHA Loans

FHA loans are a popular option for buyers with bad credit due to their lower credit requirements. Generally, you can qualify for an FHA loan with a credit score as low as 580, and with a 10% down payment, you might qualify with a score as low as 500. The Federal Housing Administration insures these loans and offers competitive interest rates, making homeownership more accessible even if your credit isn’t perfect​.

Sacramento California Home Purchase With VA Loans

You may qualify for a VA loan as a veteran, active-duty service member, or surviving spouse. VA loans often have more lenient credit requirements and typically do not require a down payment. The Department of Veterans Affairs guarantees VA loans, making them a viable option for eligible individuals without the need for perfect credit.

Sacramento California Home Purchase USDA Loans

USDA loans can be an option for homes in eligible rural areas. These loans are supported by the U.S. Department of Agriculture and are intended to promote homeownership in less densely populated areas. Depending on your credit score and other financial factors, they also feature flexible credit guidelines and low or no down payment requirements​ (Houzeo)​.

Sacramento California Home Purchase With MyHome Assistance Program

For buyers in California, including Sacramento, the MyHome Assistance Program offers down payment assistance through a deferred-payment junior loan. This can help cover some of the upfront costs of buying a home, making it easier to purchase even with a limited budget. Eligibility for this program includes being a first-time homebuyer and meeting certain income limits​ (CalHFA)​.

Credit Repair and Financial Planning When Sacramento California Home Purchase

Improving your credit score is another essential step towards buying a home. Simple actions such as paying down existing debts, avoiding new credit inquiries, and ensuring all bills are paid on time can significantly improve your credit score. Additionally, saving for a larger down payment can help compensate for a lower credit score, reducing the loan-to-value ratio and potentially qualifying you for better mortgage terms​.

Sacramento California Home Purchase With a Co-Borrower

Sometimes, a co-signer with a better credit score can help you qualify for a mortgage. A co-signer agrees to take responsibility for the loan if you default, which can provide additional security for lenders. By exploring these options and working to improve your financial situation, purchasing a home in Sacramento with bad credit can become more feasible. Each of these programs has specific requirements and benefits, so it’s advisable to contact a knowledgeable loan officer or financial advisor to discuss your particular situation and the best path forward.

Sacramento California Home Purchase Demographics

Thinking about Sacramento California Home Purchase? With a population of approximately 467,467, the median age in Sacramento is 33.4 with 42.8% married and 11.87% divorced, and 23.46% have children but are single. The average household size is 2.61 people.

For those that love the ocean, San Francisco is less than two hours away. Anyone looking to buy a new home or relocate should definitely consider Sacramento.

Median household income in Sacramento is $50,661 and median family income is $56,810. Only 12% of households have an income in excess of $100,000. A large segment of the population in Sacramento works in Management, business, finance, sales, and administrative support. Current statistics suggest job growth to be 1.31% with expected future job growth at 34.20%.

What Are The Current Housing Trends For Sacramento County?

Rent prices are increasing at fast paces in Sacramento County.  Median rent prices have surged from $1,350 for May 2015 to $1,550 for May 2016.  Increased rent squeezes renters’ savings accounts and also makes it difficult to save up for a down payment for a home purchase. For those looking to relocate to Sacramento, the real estate market is hot! 

Home values are still recovering from the housing market collapse in the prior decade.  Median home prices are approaching $300,000, which is an 11% increase over last year. 

Consumer demand is high and inventory is low.  It is very common for sellers to receive multiple offers, oftentimes far above list prices.  Further, market predictions speculate that home values will continue to rise by as much as 4% in the next year. For those of you waiting on the sidelines, experts explain that the current housing prices are still far off from the housing bubble peak of August 2005, where the median home price in Sacramento was $372,000.

Sacramento California Home Purchase Definitely Not a “Soft Market”

What is a soft market?   A soft market, as defined by Investopedia.com, is where prices rapidly drop and sellers compete to find buyers.  Prices fall as inventory surpluses create a decrease in supply and demand.  This leads to longer days on the market for sellers, lower or lesser offers, and more concessions to buyers. 

If you are looking to buy a home in Sacramento now is a great time to buy.  Real estate experts suggest current trends in real estate point to a return to normalcy, a far cry from the rocky shifts throughout the last decade.

Definitely not the case for the Sacramento real estate market today as a shortage of inventory leaves sellers with the upper hand.  Most open houses are crowded and buyers are rewarded with multiple offers on homes that are far above their asking price.

Sacramento California Home Purchase With a Lender With No Overlays

This article on Sacramento California home purchase was written by the staff of Gustan Cho Associates. Gustan Cho Associates has a big presence in the whole state of California, especially in Sacramento, California area. Gustan Cho Associates mission is to educate home buyers and homeowners in real estate and mortgage topics so they become better shoppers. Gustan Cho Associates are direct lenders with no overlays on government and conforming loans. We are also experts in Non-QM Mortgages and bank statement loans for self-employed borrowers. Gustan Cho Associates Mortgage Group are experts in the following loan programs:

• FHA Loans
• VA Loans
• USDA Loans
• Conventional Loans
• FHA 203k Loans
• Reverse Mortgages
• Jumbo Mortgages
• Non-Conforming Loans
• Fix and Flip Loans
• Asset Depletion Mortgages
• Non-QM Loans
• Bank statement loans for self-employed borrowers
• Commercial loans
• Gustan Cho Associates specialty is originating mortgage loans with no lender overlays

Gustan Cho Associates is a dba of NEXA Mortgage and is licensed in 48 states including Washington, DC, Puerto Rico, and the U.S. Virgin Islands. For more information about the contents of this article or other mortgage-related topics, please contact us at Gustan Cho Associates at 800-900-8569 or text us for faster response. Or email us at alex@gustancho.com. This article on Sacramento California Home Purchase Was PUBLISHED and UPDATED on May 4th, 2024.