How can I buy a house if I have bad credit and limited cash?

[Stephen S.]

This is not my area of competence because I generally pay all cash.  But I have a friend who has a recent foreclosure on his credit report and he and his wife have various other health related credit report flaws.

I thought of just buying them a house and renting it to them - but there must be some other  'creative'  methods for them to buy a house directly?  Can you all make some suggestions in regard to how it might be possible?  Certainly not everyone has great credit and lots of cash - what methods do They utilize to purchase properties?

stephen

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[Account Closed]

Your friends could find a house where the seller is willing to carry back the loan.  If the seller needs a downpayment, you could loan them the cash for the down,  securing your note with a mortgage against the property.

Your friends could buy the house and you could loan the entire amount, securing the note with a mortgage.

You could buy the house, retain the deed and let them make installment payments (contract for deed).  

If this is for their primary residence, there are some issues with being a compliant with Dodd Frank as a consumer lender.  But they are not insurmountable.