What is the Minimum Credit Score for a Home Loan

Minimum credit scores vary depending on the mortgage you’re trying to get, whether it is an FHA loan (Federal Housing Administration), a VA loan (Department of Veteran Affairs), or a conventional mortgage.

Conventional Mortgages

Minimum Credit Score Needed: 660 or higher.
These loans are not insured by a government agency but follow standards set by Fannie Mae and Freddie Mac. These loans are more affordable because of a low down payment and low-interest rates, but it varies with a score of 740 or higher.

FHA Loans

The minimum score required: 580 to qualify. This loan is commonly chosen by first-time homebuyers because of the low minimum credit score. If your score is below 580, you can still be approved but will pay a higher initial down payment of 10%  compared to 3.5% with a minimum of 580 credit score.

VA Loans

Only available to eligible veterans of the U.S. Military or National Guard as well as spouses of deceased military members. These loans don’t require any down payment or private mortgage insurance. Also, it doesn’t have any minimum credit score requirements but it is suggested to have around 620 as a typical for being approved.

What is considered by mortgage lenders:

  • Employment history
  • Income
  • Debt-to-income ratio
  • Down payment
  • Savings
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