These clients are Dave Ramsey students. They have no debt and no credit cards. Their home is owned free and clear. Sounds great, right? Until they tried to buy their next home and their local bank loan officer had to deliver some bad news - approval wasn’t possible at the bank because they had no credit profile. My buddy asked me to take a second look and we were fortunately able to piece it together.
The Situation
Credit score for the primary borrower and breadwinner: N/A, NONE
Credit score for the spouse, who worked part time: 722
No meaningful credit history. The wife had one small positive account, which allowed 2 of her 3 fico scores to populate.
They owned a home free and clear worth about $240,000, but it needed some repairs before being put on the market.
The new home price was $260,000 (better layout for them, despite similar price point).
They only had about $10,000 in the bank because all extra money was directed towards accelerating the payoff on the existing home.
The Challenge
Doing any kind of deal with no credit scores can be difficult.
They didn’t have enough cash to make a purchase deal work. My first instinct would be to make them sell their home first before buying.
They really wanted to buy a home first before selling, so we needed to figure out a way.
How We Structured It
HELOC/Bridge on the departing residence + conventional loan on the purchase.
We did a HELOC/Bridge loan on the departing home with our specialty HELOC product. We used only the wife’s credit, but we used the combined household income.
Our HELOC/Bridge loan uses an AVM for value, so no appraiser needed to inspect the home and kill the deal with a long list of repairs.
Because we now had 20% down, AUS (DU in this case), came back approve/eligible, which allowed us to move forward.
Why This Might Matter
Many banks/lenders don’t have programs for a no-score borrower with limited cash on-hand.
Pattern To Watch For
Lots of equity in a departing home and wants to buy a new home before selling.
Thin credit. Maybe no scores
Solid employment/income.
If you've got a client that was a Dave Ramsey student and now is having difficulty getting approved, there's may be a way to structure an approval.
Work With Me
Do you have a deal that doesn’t fit your credit policy but the client seems solid?
Reply to this email or call me at 616.298.2743 for a same-day answer.
What I Specialize In
HELOCs (complex income, credit issues, or property condition challenges)
VA loans with high DTI or non-traditional income
Low credit scores with compensating factors (equity, down payment, strong income)
Recent self-employment with documentable income
Non-QM and investor DSCR loans
Construction loans (especially investment property, FHA/VA construction, or large renovation projects)
What I Typically Don’t Do
Manufactured homes under $150K loan amount
Raw land purchases
Construction loans under $300K
One case study per week showing scenarios we’ve been able to help with