Please read your own reference, because it basically makes my point for me. The first thing they talk about in getting approved is the need for an established credit history, with bolding added by me for emphasis:
Here is what you need to do if you have no credit score but wish to purchase a home:
Make sure you have 4 alternative credit tradelines, with one of them being a rent or lease payment. Contact the creditors and get a letter from each of them on their letterhead showing your name and account number, and stating your account has been "paid as agreed for the last 12 months." This is a good start, but further documentation could be required from the creditor.
Their summary says it all, really:
In summary, no credit score loans are harder to document, harder to find lenders that will underwrite them, take longer to underwrite, may require a significant down payment, and require you to take precautions in the event the program is no longer available.
Their example is a very cheap $125k home, with 20% down. It takes most people a long time to save $25k, and those savings are losing value every day. If you're buying something closer to the national median house, you're saving even longer, and have even longer to depreciate. One thing that is going up, on the other hand, is your rent, because you have to live somewhere while you're saving all this money.
So a path to wealth building, this isn't. This is a perfect example of how wealthy and not-wealthy parents teach their children different values around money which help sort their children into wealthy and not-wealthy adults in the future. This sort of financial illiteracy more often leads to downwards mobility than the other way.
