Which of the following loans is specifically designed for individuals with lower credit scores?

The subprime mortgage is specifically designed for individuals with lower credit scores. This type of loan is tailored to those who may not qualify for traditional financing due to their credit history or financial situation. Generally, subprime mortgages come with higher interest rates compared to prime loans, reflecting the increased risk to lenders. This makes it possible for borrowers with lower credit scores to obtain financing, albeit at a higher cost.

In contrast, the other loan types mentioned have different eligibility criteria or target different borrower profiles. Conventional loans typically require higher credit scores and more stringent financial standards. FHA loans, while more flexible than conventional loans, are primarily aimed at first-time homebuyers or those with less-than-perfect credit but not specifically categorized as subprime. Jumbo mortgages cater to borrowers seeking larger loan amounts that exceed conforming loan limits, which again places emphasis on creditworthiness and financial stability. Thus, subprime mortgages directly address the needs of individuals with lower credit scores.