Can a Convicted Felon Purchase a Home (Can I Get a Mortgage with a Felony)

One of the ultimate grown-up decisions and overall major purchases in your lifetime would be that of buying a house.

It has always been considered a sound investment, but more than that, it is your home. It’s a place where you should feel safe, secure, and at peace when resting.

For the plight of the lowly convicted felon though, you feel anything but, when thinking if you are to be excluded from yet another opportunity – in this case owning a piece of the American Dream.

CAN I GET A MORTGAGE TO BUY A HOUSE WITH A FELONY?

There are two options one has when they want to purchase a home: they can pay cash or secure financing by way of obtaining a mortgage.

There are key differences with mortgage financing, such as loan product available (different types of loans) and intended use (primary residence where you will live versus an investment property that you will resell), with different qualification standards.

Concerning that, yes, a convicted felon can absolutely get a mortgage to purchase a home. More often than not, traditional lenders do not generally conduct criminal record checks on a mortgage applicant. Therefore, there is a good chance that your lender will never discover your criminal history.

So, the good news is that banks usually do not check criminal histories before approving mortgage loans. The bad news, however, is instead they are going to focus on the applicant’s financial profile.

IS IT HARDER TO GET FINANCING WITH A FELONY CONVICTION FROM MORTGAGE LENDERS?

To obtain mortgage financing, you will need to provide the lender with a set of documents that make up your financial profile. They will need to pull up your credit report, obtain tax returns, verify your income, and proof of residency going back so many years.

Having a felony conviction is undoubtedly going to impact your life in so many ways, and unfortunately, your financial affairs may take a big hit and be in a state of chaos due to this.

Criminal charges can have long-term consequences that affect various aspects of your future, including financial stability.

Bills mount up while incarcerated, and convicted felons will find themselves deep into debt by the time they have completed their sentence, frequently resulting in bankruptcy.

Adding insult to injury, an ex-offender will struggle to obtain steady employment and residency, all while still having to explain gaps in history for both due to incarceration.

Credit scores are often quite low as a result of all these hardships. Criminal records can further complicate the mortgage application process, as lenders may view them as potential risk factors.

If you have a good credit score and a felony conviction, the credit score is going to make a huge difference in your life.

Work hard to obtain (and maintain) a good credit score so you can get a home loan regardless of your criminal record.

UNDERSTANDING THE IMPACT OF A FELONY CONVICTION ON MORTGAGE ELIGIBILITY

A felony conviction can significantly impact your ability to secure a mortgage. While it’s not impossible, it does present additional challenges.

Mortgage lenders evaluate various factors when reviewing a mortgage application, including your credit history, income, employment status, and criminal history.

A felony conviction can raise concerns about your creditworthiness and stability, making it more difficult to qualify for a mortgage.

However, the impact of a felony conviction on mortgage eligibility varies based on individual circumstances. The type of felony, the time elapsed since the conviction, and your overall financial situation all play crucial roles.

Understanding the specific requirements and policies of different mortgage lenders is essential. Seeking professional advice from a criminal defense attorney or a mortgage expert can provide valuable insights and help you navigate the process more effectively.

MORTGAGE LENDER POLICIES AND CONVICTED FELONS

Mortgage lenders have varying policies when it comes to convicted felons. Some lenders may have stricter requirements or may outright reject applications from individuals with a felony conviction.

Others might consider the nature of the felony, the time since the conviction, and your credit history and financial situation.

It’s crucial to research and understand the policies of different mortgage lenders before applying. Some lenders may offer more flexible terms or be more willing to work with individuals with a felony conviction.

Additionally, government-backed loans, such as FHA loans, often have more lenient requirements, making them a viable option for those with a felony conviction. Understanding these policies can help you find a lender that suits your needs.

STATE-SPECIFIC LAWS AND REGULATIONS

State-specific laws and regulations can significantly impact mortgage eligibility for individuals with a felony conviction.

Some states have laws that prohibit lenders from discriminating against individuals with a felony conviction, while others require lenders to consider the nature of the felony and the time elapsed since the conviction. Understanding the specific laws and regulations in your state is crucial.

Consulting with a criminal defense attorney or a mortgage expert can help you determine how these laws may impact your mortgage eligibility.

Being informed about your state’s regulations can provide you with a clearer path to securing a mortgage despite having a felony conviction.

WHAT WOULD IT COST TO GET FINANCING IF YOU HAVE A FELONY CONVICTION?

For those with less-than-desirable credit scores, fret not, as you may still qualify for a home mortgage, felon or not.

There are many loan products available, including loans that will cater to someone (re) establishing their credit, however, the lender will look to minimize their risk by increasing the interest rate at which they lend you money, ultimately costing more for the consumer.

Yes, a felony conviction does not directly affect loan approval, but indirectly it has a profound impact on one’s life where the collateral damage is felt and seen on your finances, thus affecting your ability to obtain a mortgage.

MORTGAGE OPTIONS FOR FELONS

While a felony conviction can limit your mortgage options, several viable options are still available:

• FHA Loans: FHA loans are government-backed and often have more lenient requirements for individuals with a felony conviction. To qualify, you’ll need a credit score of at least 580 and a 3.5% down payment.
• VA Loans: VA loans are available to veterans, military members, and their spouses. These government-backed loans may also have more lenient requirements for individuals with a felony conviction.
• Private Lenders: Some private lenders may offer more flexible terms or be more willing to work with individuals with a felony conviction. However, these loans may come with higher interest rates or stricter requirements.

Exploring these options can help you find a mortgage that fits your needs and circumstances.

HOW DO I GET A MORTGAGE WITH A FELONY CONVICTION?

Felon or not, you must still be prepared to answer any questions and gather all documents necessary for securing a loan/financing, which generally includes:

• Credit report
• Income tax returns for the past two years
• W2 / Wage statements from your employer for the last 2 years
• Last three months’ bank statements
• Verification of rent
• A letter explaining any issues that need clarification on your finances (such as why something went into collections and/or something negatively impacting your credit score).

You must also save money for down payments. You must focus on maximizing your credit score. This applies to anyone looking to purchase a home, felon or not.

IMPROVING YOUR CHANCES OF GETTING A MORTGAGE WITH A FELONY CONVICTION

While a felony conviction can make securing a mortgage more challenging, there are steps you can take to improve your chances:

• Improve Your Credit Score: A good credit score can help offset the negative impact of a felony conviction. Focus on making timely payments, reducing debt, and regularly monitoring your credit report.
• Provide Detailed Explanations: Be prepared to explain the circumstances surrounding your felony conviction. Providing detailed explanations can help lenders understand your situation better and make a more informed decision.
• Seek Professional Advice: Consult with a criminal defense attorney or a mortgage expert to understand the specific requirements and policies of mortgage lenders.
• Consider Alternative Lenders: Some lenders may be more willing to work with individuals with a felony conviction. Explore alternative lenders or government-backed loans that may have more lenient requirements.

By taking these steps, you can improve your chances of securing a mortgage despite having a felony conviction.

Conclusion

Many felons believe that their lives are over once convicted. That is a matter of opinion and not a fact. Yes, a felony conviction is going to turn your life upside down, however, you do not need to let it ruin your life. If you’re willing to work hard, you can overcome any and every obstacle you encounter.

So, the good news is that banks usually do not check criminal histories before approving mortgage loans. Most banks do not run criminal record checks, showing leniency towards criminal history in this context.

Suffice it to say, you don’t need to let a felony conviction stop you from buying a home, as obtaining a mortgage is really more dependent on your financial history and not your criminal history.