What Credit Score Do I Need to Buy a House? The 2026 Rules

Getting ready to buy a house means getting deeply familiar with your own credit score. You might have a number in your head — maybe a 600, maybe a 720 — and you're trying to figure out whether that number means you can buy a house or whether you should wait.

On November 16, 2025, Fannie Mae officially eliminated the 620 minimum credit score requirement for conforming conventional loans run through its Desktop Underwriter (DU) system.[1] Freddie Mac made a parallel change for Loan Product Advisor (LPA) earlier in 2025.[2] For the first time in decades, there's no hard federal floor on what score you need for a conforming conventional loan … in theory.

In practice, most lenders still want to see a score of 620 or higher because their internal policies haven't caught up with the agency change. But the policy shift matters; it opens real doors for buyers who've been told "no" before their file was even fully evaluated. And it doesn't change the other central truth: the score you bring still dictates the rate you pay. On a $400,000 loan, a 100-point difference in your FICO can cost you more than $70,000 over 30 years.

A few things are worth knowing before you talk to a lender: which score the lender will actually pull (probably not the one your Credit Karma app shows you), what else goes into the approval beyond the score, and what not to do in the 60–90 days before you apply.

What credit score do you actually need to buy a house in 2026?

The short answer: there's no single number. Different loan types carry different minimums, lenders add their own requirements on top of those, and your score's biggest practical job — regardless of program — is to help determine the interest rate you'll pay for the life of the loan.

Fannie Mae's Selling Guide Announcement SEL-2025-09 formally eliminated the 620 threshold effective November 16, 2025, for loans run through Desktop Underwriter.[1] Freddie Mac made a parallel Loan Product Advisor change in 2025.[2] The automated underwriting software no longer automatically rejects an application because the score is below 620; instead, DU and LPA evaluate the full file — reserves, income, DTI, payment history — and make a holistic call.

Most lenders haven't updated their internal policies, though. The agency floor is gone; the lender floor often isn't. Two data points capture the contradiction.

The median FICO score for purchase loans hit 768 in May 2025, a record high, even as agency minimums were loosening.[3] At the same time, 6.5% of first mortgages in 2025 went to borrowers with scores below 620.[4] Credit standards have tightened in practice even as policy has loosened; the net effect is that more sub-620 files get looked at, but fewer get approved easily.

For most buyers, the realistic answer lands between 580 and 700+, depending on loan type and lender.

Ready to get prequalified? Best Interest Financial can help to figure out how much home you can afford.

Credit score minimums by loan type (2026)

Before you can match yourself to a loan program, you need to understand two things that constantly get conflated: agency minimums and lender overlays.

The agency minimum is the floor set by Fannie Mae, Freddie Mac, FHA, the VA, or USDA — the federal entities that back or guarantee most mortgages. The lender overlay is the additional threshold your bank or mortgage company layers on top of that. They're separate rules, and both are real. FHA's official minimum is 580 for 3.5% down; plenty of lenders won't touch an FHA loan below 620 or 640. That's not a scam; it's how the market works. If one lender declines, another may approve at the exact same score.

Sources: Fannie Mae, HUD, VA, USDA, FHFA [1] [5] [6] [7] [8]

"Federal law mandates a minimum credit score of 620 for a mortgage" is one of the most common myths in discussions on this topic. It's wrong. The 620 was a Fannie/Freddie guideline, not a law, and it's gone at the agency level now, anyway.

Two lines in that table deserve a bit more explanation. On FHA: your neighbor who got an FHA loan at 580 and your Maryland lender who told you 650 are both telling the truth. The 580 is FHA's minimum. The 650 is the lender's. Different institutions will have different overlays, so shop around before concluding you're not FHA-eligible.

On jumbo loans: once your loan amount exceeds the conforming limit ($832,750 in most areas, $1,249,125 in high-cost markets in 2026), you're in jumbo territory.[8] Jumbo loans don't run through Fannie or Freddie, so lenders write their own rules: typically 700 or higher for the score, with strong reserves required, often 12 months of PITI or more.

How your credit score actually affects your mortgage rate

Your credit score doesn't just determine whether you get a loan. It determines what that loan costs you, every month, for 30 years.

Current rate data from Curinos via myFICO puts the spread in concrete terms: a borrower with a 700 FICO averaged 6.63% on a 30-year conventional in March 2026; a borrower with an 800 FICO averaged 6.41% as of February 2026.[9] The broader Freddie Mac Primary Mortgage Market Survey (PMMS) put the market average at 6.51% as of May 21, 2026.[10] On a $400,000 loan, that spread compounds into real money:

Note on rate estimates: The 760–850 and 700–759 figures come from Curinos via myFICO, March 2026.[9] Estimates for the 660–699 and 620–659 tiers are based on Fannie Mae LLPA grid structures; pull live pricing from myFICO's Loan Savings Calculator at the time of application for your specific scenario.

What's an LLPA?

Loan-level price adjustments (LLPAs) are how Fannie Mae and Freddie Mac build risk pricing into conventional mortgages. They're upfront fee adjustments — charged as discount points, or rolled into your rate — that lenders pass through based on your credit score, down payment, and loan type.

Brett Johnson, owner of New Era Home Buyers and a licensed real estate agent with more than 100 real estate investment transactions, describes the current spread: "As of mid-2026, the spread is roughly 0.75% to 1.125% higher for a 620 FICO on a 30-year conventional than for a 760. The reason is that Fannie Mae's LLPA grids apply heavy, risk-based pricing penalties for credit scores below 720."

That pricing is stepped-up, not smooth, and the steps are 20-point increments. The difference between a 619 and a 620 can be dramatic; the same is true at the 660, 680, and 720 thresholds. If you're near one of those lines, even a small score move before applying can meaningfully change your rate tier.

The credit score your lender pulls is probably not the one you're looking at

This is the single biggest surprise at pre-approval, and almost no one warns buyers about it beforehand. If your Credit Karma says 740 and your lender comes back with a 680, you haven't been deceived; you've encountered a scoring model difference.

Why your Credit Karma score and your mortgage score are different

Jeffrey Hensel, Broker Associate at North Coast Financial with more than 10 years of California lending experience, sees this conversation at nearly every pre-approval: "Nearly every pre-approval I do involves a conversation about the Credit Karma score. The buyer comes in confident — they know their score from the night before. Then we pull the mortgage credit report and it's materially less. Sometimes 30 points. Sometimes 60. Credit Karma uses VantageScore, which isn't used by lenders. Mortgage lenders use FICO 2, FICO 4, and FICO 5 — older versions, weighted differently, and they price more conservatively than what a borrower sees on their phone."

Credit Karma, Rocket Money, and most consumer banking apps display your VantageScore 3.0, or sometimes a FICO 8. Mortgage lenders pull something different: FICO Score 2 from Experian, FICO Score 4 from TransUnion, and FICO Score 5 from Equifax. These are older FICO models that score the same underlying credit data more conservatively. They penalize high utilization, thin files, and recent activity more heavily than FICO 8 or VantageScore do.[11]

The gap between what your app shows and what a lender sees typically runs 30–70 points lower, and sometimes more than 100. It's the same credit report scored against an older algorithm that prices more conservatively.

One important update: as of July 8, 2025, the FHFA authorized lenders selling loans to Fannie and Freddie to use VantageScore 4.0 in addition to Classic FICO models.[12] FICO 10T's implementation date remains to be determined.[13] The transition is real but slow; for now, most lenders are still using FICO 2/4/5.

How to check the score your lender will see

You have three practical options, in order of cost.

• AnnualCreditReport.com: free. The federally authorized source for your underlying credit reports from all three bureaus. It shows accounts, payment history, balances, and derogatory items, but not your FICO score. Use it to spot errors before a lender runs a hard pull. Under the Fair Credit Reporting Act, bureaus must respond to disputes within 30 days.[14]
• myFICO: $19.95 to $39.95/month. The only consumer service that shows your actual FICO 2, FICO 4, and FICO 5 mortgage scores without a lender pulling them. If you're within 60 days of applying and your score is near a pricing threshold, the cost is usually worth it.[15]
• A lender soft pull during prequalification: free. Soft pulls don't affect your score, and the lender will show you exactly what they see. For most buyers, this is the most direct path.

One more piece of mechanics worth understanding: lenders pull all three bureaus and use the middle score for pricing, not the highest and not the average. If you're co-borrowing, the lender typically uses the lower of the two middle scores. That means adding a co-borrower with strong income but a lower score can sometimes hurt the pricing rather than help it. Run the numbers both ways before deciding how to structure the application.

Paul Ferrara, senior wealth counsellor (CIM) at Avenue Investment Management, adds a useful point on how quickly the score can move once you know where you actually stand: "Each time a mortgage score sees credit-card balances fall below 10% of the limit, it can improve by 20 to 40 points in a single billing cycle. With a Rapid Rescore, that change can show up in 3 to 5 business days. There's much more control on most buyers' part than they realize."

What lenders look at besides your credit score

The score gets you in the door. What's in the rest of the file determines whether you get through it.

Four factors carry significant weight alongside your score, and for sub-620 applications post-November 2025, these aren't supplementary — they're often the deciding factors.

Debt-to-income ratio (DTI)

Debt to income, or DTI, is your total monthly debt payments divided by your gross monthly income. For most conventional loans, lenders want to see DTI below 43%; FHA allows up to 50% with compensating factors.[5] A 620 borrower at 28% DTI often gets a better result than a 680 borrower at 47%. The score is the headline; the file is the story.

Down payment

A larger down payment doesn't formally lower the score requirement on most programs, but it materially changes pricing through LLPA adjustments and opens up portfolio lender and non-QM loan options that agency guidelines don't constrain. Putting down 15–20% instead of 3–5% can shift the conversation significantly when the score is below 680.

HMDA 2024 data show average credit scores by loan type — conventional borrowers at 755, FHA at 692, VA at 725 — which is well above agency minimums.[16] Compensating factors like a larger down payment are often what gets sub-minimum files through.

Cash reserves

Lenders are most interested in how many months of housing expenses (principal, interest, taxes, and insurance — what lenders call PITI) will be remaining in your accounts after closing. Two months is standard; six months is strong; 12 or more months can move a sub-620 file through DU in a way that almost nothing else can.

Employment and income stability

W-2 documentation is relatively straightforward: two years of tax returns and recent pay stubs. Self-employed, 1099, and gig income earners face a higher bar. Lenders typically want two full years of federal tax returns — personal and business, averaged — and some underwriters have asked for even more history. Variable side income is harder still: if your gig work fluctuates significantly year to year, underwriters may discount it or exclude it entirely, regardless of how high the gross number looks. Be prepared to document it thoroughly, and don't count on inconsistent side income to carry your DTI calculation.

Two buyers with identical 620 scores can get wildly different answers from the same lender. The score is one input into a larger model; the model's output depends on what surrounds it.

Buying a house with low or no credit

FHA, VA, and USDA: The low-score paths

FHA loans are the most widely used option for buyers with lower credit scores. The official HUD minimum is 500 with a 10% down payment, or 580 with 3.5% down.[5] In practice, lender overlays push the floor to 600–640 at most institutions. FHA tolerates higher DTIs, collections, and recent late payments more than conventional underwriting does; it was designed for buyers that mainstream underwriting declines.

VA loans are the best deal in mortgage lending for eligible service members, veterans, and surviving spouses. The VA sets no federal minimum credit score.[6] The program requires no down payment, no PMI, and no mortgage insurance premium. Lender overlays set the practical floor at 580–660. If you're VA-eligible, get a VA quote from a lender before assuming FHA is your only option.

USDA loans cover rural and some suburban properties, require no down payment, and carry no agency-set score minimum. Automated underwriting typically requires a 640 for USDA's guaranteed loan program; manual underwriting is available below that.[7] The USDA property eligibility map covers more ground than most buyers realize, so it's worth checking before ruling it out.

A note on manual underwriting: when DU or LPA returns a "refer" rather than an "approve/eligible," lenders can manually underwrite the file using a fuller review of your situation. It takes more documentation and more time, but for thin files and sub-620 conventional borrowers post-November 2025, it's a real path.

The post-November 2025 sub-620 reality

Ferrara cuts through the most common misreading of the Fannie/Freddie change: "The biggest misimpression I'm seeing is that because the 620 floor is gone, lenders made it easier to qualify. They didn't. The algorithm just has more room to weigh the rest of the file. My most recent one: a borrower with a 588 FICO, 14 months of reserves, 31% DTI, and 26 months of verified on-time rent payments. DU came back 'approve/eligible.' The score didn't get them there. Everything around the score did."

Johnson closed a similar file with a different compensating-factor stack: "A recent file: a buyer with a 605 FICO approved on a conventional loan. The 'why' was a 15% down payment — not 3 to 5 — plus 6 months of housing expenses in reserves after closing, zero debt outside of student loans, and a DTI under 35%. DU is leaning heavily on cash reserves and low DTI now, not just the score."

The path below 620 exists, but it requires more documentation, more patience, and a lender willing to work the file rather than pass on it because the overlay says no. Not every lender will.

Shopping two or three lenders, including a mortgage broker who works with multiple investors, matters more for sub-620 borrowers than for anyone else.

What if I have no credit history?

A thin file is a separate problem from a low score. A thin file means fewer than three to five active tradelines, or a scoreable history of less than six months. Automated underwriting systems often return "unable to determine" rather than a low score, and those are different situations requiring different solutions.

The path through a thin file runs through manual underwriting, combined with non-traditional credit documentation: rent payment history, utility payments, and insurance payments, sometimes documented through services like Experian Boost or UltraFICO. The November 2025 Fannie/Freddie changes created new pathways for thin-file borrowers via DU's enhanced credit risk assessment, but most lenders haven't deployed that flexibility yet. A broker who actively works with multiple investors is more useful here than a single bank with rigid overlay policies.

Buying after bankruptcy or foreclosure

Waiting periods are a source of real confusion. Buyers in online forums quote everything from one year to five years as the FHA post-bankruptcy requirement — and both sides are partially right; they're citing different rules.

The agency waiting periods:

• FHA: 2 years post-Chapter 7 discharge; 1 year into a Chapter 13 repayment plan with on-time payments and court trustee approval.[5]
• VA: 2 years post-Chapter 7; 1 year into a Chapter 13 repayment plan with trustee approval.
• Conventional: 4 years post-Chapter 7; 2 years post-Chapter 13 discharge.

These are agency floors. Lender overlays routinely add 12–24 months on top of them. The buyer who says "FHA is 1 year" is citing the agency rule; the lender who won't touch the file until 3 years have passed is citing an overlay. Both are real; neither is wrong.

How to actually improve your credit score before applying

Skip the credit-repair company promises. Getting from 560 to 700 realistically takes 12–18 months of consistent behavior if the underlying issues are solvable ones: high utilization, errors, limited history. It can't happen in a few weeks regardless of what you pay someone, and no one can legally remove accurate negative information from your report.

Here's what actually moves the score, with realistic timelines attached:

Pull all three credit reports at AnnualCreditReport.com (free). Do this before you talk to a lender. You're looking for errors: accounts that aren't yours, payments reported as late that weren't, balances that don't match your records. Under the Fair Credit Reporting Act, bureaus must respond to disputes within 30 days.[14] Disputing and removing an inaccurate derogatory item can move your score meaningfully and costs nothing.

Pay card balances before the statement closes, not just by the due date. This is the fastest legitimate score move available. Credit card issuers report your balance to the bureaus on your statement close date, and that reported balance determines your utilization ratio. Bringing each card below 10% of its limit before the close date can move your score 20–40 points in a single billing cycle. Because FICO 2/4/5 mortgage scores penalize utilization heavily, this move often improves your mortgage FICO more than your consumer score. Ask your lender about a Rapid Rescore if you've just paid down balances; the updated score can appear in 3–5 business days rather than waiting for the next reporting cycle.[11]

Pay every bill on time for the next 60–90 days, without exception. Payment history is 35% of your FICO score.[11] One 30-day late payment inside the pre-application window can drop you into a worse pricing tier at exactly the wrong moment.

What NOT to do in the 60–90 days before applying

This is where the most avoidable damage happens.

Don't close old credit cards. Closing your oldest card simultaneously drops your available credit (raising your utilization ratio), reduces your average account age, and removes a positive tradeline from your report. A 20–40-point overnight drop isn't unusual. Hensel explains the mechanism: "The one that surprises people is paying off the auto loan right before they apply. It feels responsible, and the loan was contributing positive credit mix and active account history. The moment it's closed, the score can drop in a way that feels backwards. Closing an old card has a similar effect — available credit drops, utilization rises, and the average account age falls."

Don't pay off an installment loan right before applying. FICO weights credit mix at 10%. An active installment loan contributes to that mix; when it closes, you lose both the mix credit and the active tradeline simultaneously.

Don't open new credit. No new store cards, auto loans, balance-transfer applications, or credit card accounts. Each hard inquiry can drop your score a few points, and the new account lowers your average account age. Hold off for the full pre-application window.

Don't make large unexplained cash deposits. This is an underwriting concern more than a score concern. Cash deposits over a few thousand dollars need a documented source. Gift funds need a gift letter. Underwriters are required to document the source of all closing funds; "I had the cash at home" is not sufficient documentation.

Should you wait to buy, or move forward now?

The standard advice is to wait and improve your score. Sometimes that's right. Often it's not, and the math rarely gets run before the recommendation gets made.

The case for waiting looks like this: improving your score by 40 points might reduce your rate by 0.3–0.5%, saving $50–$75 a month on a $350,000 loan. Over 30 years, that adds up.

Ferrara runs the other side of the equation: "A 40-point improvement might save $50 to $75 a month on a $350,000 loan. But if rent goes up $200 at renewal and home prices climb 5 to 7%, the math falls apart fast. Waiting should be a smart decision, not an automatic one — and it shouldn't be triggered by some 'round number' on a credit report."

Hensel makes the same point through a specific example: "If a house someone was looking at went from $450,000 to $490,000 over 12 months, the interest savings from improving your score may not cover the $40,000 price increase. Buying now and refinancing later once the score improves is a legitimate strategy, and too many buyers don't consider it."

A two-question framework helps most buyers think through their specific situation:

Is your low score the result of a fixable issue? One recent late payment, one unpaid collection, high utilization on a single card — these are addressable in 60–90 days with focused effort. If a short window gets you into a meaningfully better pricing tier, waiting is often the smarter call.

Is your low score the result of structural factors? A thin file, a high DTI you can't quickly reduce, or a limited credit history across multiple accounts takes 12–18 months or more to change. Meanwhile, rent is probably climbing, and home prices may be, too. Waiting in that scenario is a financial decision, not just a credit-improvement plan, and it deserves the full math treatment.

Working with a good real estate agent also matters more than most buyers realize at this stage. Credit-constrained buyers face real headwinds in competitive markets: FHA offers carry a stigma with some sellers, and structuring an offer that competes requires skill and local knowledge. Finding an experienced agent who knows your score range and your target market before you start touring is worth doing early in the process.

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