The simple answer is YES. There are still programs available in the market but they are somewhat limited.

Sub prime is a phrase used to describe products that are catered to people that do not fit the normal lending guidelines. Examples are: previous bankrupts with less than 2 years discharged, current and past credit problems, self-employed with little provable income, clients in credit counseling, low credit scores, judgements, outstanding tax arrears and the list goes on.

We currently have access to institutional lenders and in recent years the private lending market has increased (this option also includes the lease to own products). Each one of these lenders have their own policies and procedures.

Instead of going into all these policies in depth I have compiled a quick list of what they can do:

1. Properties normally required to be in a urban setting. (Rural areas are available but on case by case). The property is the single most important aspect of any sub-prime deal. If the property does not fit the lenders criteria they will not do the deal.

2. Loan to value up to 80% – for example on a 100k purchase they will lend up to 80k. Loan to value decreases depending on the lender and the client situation.

3. They will payout collections, judgements, OPD or credit counseling, tax arrears, bankrupts with less than 2 years discharged and by doing this we can work on improving your credit to get you back into more normal traditional lenders.

4. Rental properties.

5. Raw land, commercial, land development, builder loans etc.

6. Self-employed clients who show little income or have taxes due.

As you can see there is still a number of options available in the market place. It’s safe to say you should not prejudge any situation until you speak to someone who specializes in this type of lending.

I am available to discuss any situation including the non-traditional deals.

As always comments are appreciated and encouraged.


Eric Gall is a mortgage specialist for TMG Atlantic. If you are purchasing, refinancing or renewing your mortgage contact Eric or check out his website and apply online.