Credit Score & Home Buying

Why does my credit score matter more than I think?

Your credit score determines more than approval — it determines your options. A Conventional loan generally requires a minimum credit score of 620. FHA loans can go as low as 580, and USDA loans (for eligible rural/suburban properties) also allow scores as low as 580 with no down payment required. Knowing which programs you qualify for before you start house hunting can change your whole approach.

Minimum Credit Scores by Loan Type

Conventional Loan: A non-government-insured loan backed by Fannie Mae and Freddie Mac, subject to financing limits set by the Federal Housing Finance Agency (FHFA). Minimum credit score: 620.

FHA Loan: A federal loan program created by the U.S. Department of Housing and Urban Development (HUD) for lower-income borrowers. Easier to qualify for than a conventional loan, insured by the Federal Housing Administration and issued by an FHA-approved lender.

USDA Loan: Created by the U.S. Department of Agriculture for borrowers purchasing in eligible rural and suburban areas. Features no down payment, credit scores as low as 580, and a guarantee fee (mortgage insurance) around 2%.

VA Loan: Created by HUD for veteran, active-duty, and reservist military personnel, and surviving spouses of veterans. Easier to qualify for than a conventional loan, with credit scores as low as 580 and higher allowable debt-to-income (DTI) ratios.