Qualifying for a mortgage comes down to four things underwriters check in order: your credit, your income, your assets, and the property. On credit alone, most conventional lenders look for a 620 middle score, FHA loans go down to 580 with 3.5% down (or 500 with 10% down), and most approvals land at a debt-to-income ratio at or below 43% – 50%.

None of those numbers is a wall, they’re where pricing and program options start to change. A 640 score doesn’t disqualify you from anything; it changes which lender is right for your file. Learn more about credit and qualifying for a mortgage, including how your debt-to-income ratio is calculated, which fixes move a score fastest, and how self-employed income gets documented.

Key takeaways:

• Score minimums by program: Conventional loans generally start at a 620 middle score, FHA at 580 with 3.5% down, USDA around 640, and jumbo loans commonly at 700 – 720.
• DTI is the quieter gate: Most approvals land at or under 43% – 50% total debt-to-income, and lowering a single installment payment often does more for approval than raising a score.
• Minimums are lender-specific, not just program-specific: Overlays vary widely between wholesale lenders on the same FHA or conventional program, which is exactly what a broker shops for.

What credit score do you need to buy a house?

Most buyers need a middle credit score of 620 for a conventional loan or 580 for an FHA loan with the minimum down payment. Your middle score is the median of the three a lender pulls; on a conventional loan with more than one borrower, Fannie Mae has the lender use the average of the borrowers’ median scores. This is the credit-and-qualifying chapter of our broader Mortgage Basics guide.

Conventional

A 620 middle score is the working floor, and pricing improves in tiers at roughly 680, 720, and 740. One nuance: Fannie Mae’s Selling Guide states that no minimum credit score is required for a loan casefile underwritten through Desktop Underwriter. The 620 minimum (640 on ARMs) applies to loans not run through DU. Wholesale lenders still enforce their own 620 floor anyway. See what’s a good credit score to buy a house.

FHA

FHA sets 580 as the minimum decision credit score for maximum financing at 96.5% loan-to-value, the 3.5% down payment everyone quotes.³ Scores of 500 – 579 stay eligible but cap at 90% loan-to-value, meaning 10% down. Most wholesale lenders overlay upward to 580 – 620, exactly the gap a broker works in.

VA

The Department of Veterans Affairs sets no minimum credit score at all. Every score requirement on a VA loan belongs to the lender, not the agency.² Lenders in Align’s network commonly land between 580 and 620, a spread wide enough that shopping the file matters more here than anywhere.

USDA

A 640 score is the practical threshold on USDA’s guaranteed rural housing loans: USDA’s handbook treats 640 as the point where an applicant meets its credit reputation standard. Below 640, USDA directs lenders to a “cautious” manual review, not an automatic decline.

Jumbo

Jumbo loans sit outside agency guidelines, so the standards belong to whoever buys the loan. Lenders in Align’s network typically want a 700 – 720 score plus several months of reserves. And because Align is a broker, the same 601 score declined at one wholesale lender may be approved at another, see how your credit impacts buying a house.

How your debt-to-income ratio works

To find your debt-to-income ratio, divide your total monthly debt payments by your gross monthly income, income before taxes, not take-home pay. The front-end ratio counts only the housing payment (full PITI, plus any HOA dues and mortgage insurance, see our Payments, Escrow & Servicing hub); the back-end ratio adds every other obligation on your credit report, and it decides most files.

Say you earn $6,500 a month before taxes, carry a $700 car payment and $250 in student loans, and want a $2,100 housing payment. Your front-end ratio is 32%; your back-end ratio is $3,050 divided by $6,500, or roughly 47%, approvable on plenty of programs, tight on others.¹

On the ceilings: Fannie Mae allows up to 50% total DTI through its automated engine; manual conventional files run to 36%, stretching to 45% with the required score and reserves. FHA’s manual underwriting caps ratios at 31/43 for nontraditional or insufficient credit, and 37/47 with compensating factors. Our explainer on the debt-to-income ratio (DTI) shows which debts count; the CFPB covers what a debt-to-income ratio is.

How to bring your DTI down

• Pay off the smallest-balance installment loan: DTI counts the monthly payment, not the balance, so retiring a $400 car loan with $3,000 left beats putting that $3,000 anywhere else.
• Avoid new debt entirely: Financing furniture or a vehicle mid-process adds a payment to the ratio underwriting already approved.
• Document additional income: Bonus, overtime, and part-time income counts with a two-year history behind it, documented, not described.
• Buy less house: A $200 lower payment moves that 47% example down about three points.

Our guide to improving your debt-to-income ratio runs the math on which debt to attack first.

Student loans and DTI

Student loans are the most common reason a strong borrower’s ratio blows up, because programs count them differently. Deferred loans, forbearance, and $0 income-driven payments fall under program-specific rules. One may use the documented payment, another a percentage of the balance. See buying a home with student loan debt.

How mortgage underwriting actually evaluates your file

Underwriting is where an automated engine, then a human, verifies everything you claimed, typically 1 – 3 weeks from submission to clear-to-close. Underwriters review four categories:

• Credit: Your middle score plus the story behind it, late payments, collections, and account age.
• Capacity: Your debt-to-income ratio and the stability of the income behind it, usually documented across two years.
• Capital: Down payment, closing costs, and reserves. The housing payments you’d have left after closing.
• Collateral: The appraised value and condition of the property, which has to support the loan amount by itself.

Our guide to mortgage underwriting walks through the document list, and our How Mortgages Work hub covers the surrounding process.

Automated vs. manual underwriting

Automated underwriting runs your file through an engine, Fannie Mae’s Desktop Underwriter, Freddie Mac’s Loan Product Advisor, FHA’s TOTAL Scorecard, or USDA’s GUS, and returns a recommendation in minutes. Manual underwriting is a human reading the file against program guidelines, how borrowers with no credit score still get approved, at the cost of tighter ratios.

What triggers conditions

• Large deposits: Fannie Mae defines a large deposit as one exceeding 50% of your total monthly qualifying income, and lenders review the last two months of statements. Anything that isn’t payroll needs a paper trail.
• Job changes: Employment is re-verified before closing, so switching employers or moving to commission restarts the income analysis.
• New credit inquiries: Lenders re-pull credit before funding, and a new tradeline can send the file back to underwriting.

How to strengthen a thin or damaged credit file

Most fixes that move a mortgage score show up within 30 – 60 days, because creditors report to the bureaus monthly. That’s why credit work belongs 60 – 90 days before you shop.

Fastest levers first

• Pay revolving balances down: Balances reported at or below roughly 30% of the limit score better than balances near the cap. Usually the fastest lever available.
• Dispute genuine reporting errors: Pull all three reports free at AnnualCreditReport.com. Duplicate collections and accounts that aren’t yours are common and correctable.
• Keep old accounts open: Closing a twelve-year-old card shortens your average account age and raises your utilization.
• Add an authorized-user tradeline carefully: Being added to a well-managed older account can help a thin file, but only if that account is genuinely clean.

Our roundup of credit repair strategies for home buyers ranks these by how much lift they produce.

Getting credit for the rent you already pay

If you’ve paid rent on time for years and it’s nowhere on your credit report, that’s a fixable gap. Rent-reporting services push your history to the bureaus, and some newer scoring models count rental tradelines. Though not every model a lender pulls will. See reporting rent for a credit boost.

Buying with a lower score right now

You can buy with a score in the 500s or low 600s; the honest tradeoff is a higher rate, sometimes a larger down payment, and fewer lenders competing. If six months of focused work moves you two pricing tiers, waiting usually wins. If your file is thin rather than damaged, it doesn’t. See buying a home with bad credit for the programs that still work.

Should you add a co-signer?

Sometimes, but understand what you’re asking. A co-signer takes on 100% of the liability, the mortgage appears on their credit report, and it counts against their own DTI if they later want to borrow. On a lot of files, two months of paying down balances beats adding a family member to the note. Weigh the risks and benefits of co-signing a mortgage first.

Qualifying with self-employed, freelance, or variable income

Most programs average two years of documented self-employment income, and the figure that counts is net income after business deductions, not gross receipts. Fannie Mae allows a one-year history in limited cases, when the most recent returns show twelve months in the current business and you document prior income at the same level in the same field.

• Two-year averaging: A strong recent year gets diluted by a weaker prior one.
• Declining income: If year two came in lower than year one, expect underwriting to use the lower figure and ask why.
• Write-offs cut both ways: Every deduction that lowered your tax bill also lowered the income a lender can use. Raise this with your accountant the tax year before you buy.
• Bank statement programs: Some wholesale lenders qualify you on 12 or 24 months of deposits instead of returns, at the cost of a higher rate and larger down payment.

Bank statement programs are wholesale products most retail banks don’t offer. Our guide to buying a home as a freelancer covers the document list, and our Mortgage Terminology hub defines the vocabulary.

What Michigan buyers should know

• MSHDA credit floor: The Michigan State Housing Development Authority requires a minimum 640 credit score on its MI Home Loan, higher than FHA’s 580, plus income limits that vary by family size and county, and a statewide sales price limit of $566,355 as of June 1, 2026.
• Assistance stacks on top of qualifying: The MI 10K DPA Loan provides up to $10,000 toward down payment and closing costs as an interest-free second lien, so it has to fit inside the first mortgage’s structure, check eligibility before you tour homes.
• Housing education takes time: MSHDA requires a housing education class from a MSHDA-approved provider, and the certificate of completion is a closing condition, start it the week you start looking.

FAQ: Credit and qualifying for a mortgage

Here are answers to common questions about credit and qualifying for a mortgage.

How long after a bankruptcy or foreclosure can I get a mortgage?

It depends on the program and the event. Conventional loans generally require 4 years after a Chapter 7 bankruptcy and 7 years after a foreclosure, while FHA and VA loans commonly allow 2 years after Chapter 7 and 3 years after a foreclosure. Extenuating circumstances can shorten several of those clocks. Because seasoning rules vary by wholesale lender, it’s worth having a broker check your specific dates rather than assuming you’re years out, start with buying a home with bad credit.

Does shopping for a mortgage hurt my credit score?

Barely, and not the way most people fear. Scoring models treat multiple mortgage inquiries made inside a 14- to 45-day window as a single event, so comparing several lenders costs you about the same as comparing one. The bigger risk is opening new credit cards or financing furniture during your loan process, which changes your debt-to-income ratio mid-file. See how your credit impacts buying a house.

Can I get a mortgage with no credit score at all?

Yes, through manual underwriting. If you have no traditional credit, lenders can build a nontraditional credit history from 12 months of on-time rent, utility, insurance, and phone payments, typically requiring three or four such accounts. FHA and VA loans are the most accommodating here. Reporting rent for a credit boost can also establish a scoreable file before you apply.

Will paying off my car loan help me qualify for more house?

Often, yes, and more than paying down a credit card would. Because debt-to-income ratio counts your monthly payment rather than your balance, eliminating a $500 car payment can free up roughly $500 of housing payment capacity, which translates to a meaningfully larger purchase price. Run the numbers before you write the check; our guide to improving your debt-to-income ratio shows which debt to attack first.

The bottom line on credit and qualifying

Conventional loans generally start at a 620 middle score, FHA reaches down to 580 with 3.5% down and 500 with 10% down, USDA and MSHDA both center on 640, and VA sets no agency minimum. Most approvals land at or under 43% – 50% total debt-to-income. The number that actually decides your file is the overlay each wholesale lender layers on top, and those differ enough that one lender’s decline is another’s approval.

If you’re ready to find out what you actually qualify for, talk to Align Lending, we’ll run your scenario past competing wholesale lenders and show you where your file lands, side by side. Call 248-506-5727 or start online today.

Footnotes:

1. Example figures are hypothetical and for educational purposes only; they do not constitute an advertisement of credit terms or a rate quote under federal or state lending laws. Your rate and terms will depend on your application and market conditions. Return to text
2. Align Lending works with VA-approved lenders and is not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency. Return to text
3. Align Lending is not acting on behalf of or at the direction of FHA or HUD. Return to text

This article is for informational purposes only and is not intended to provide legal, financial, or tax advice. Consult a qualified professional about your situation. Align Lending works with FHA- and VA-approved lenders and is not acting on behalf of, endorsed by, or sponsored by FHA, HUD, or the Department of Veterans Affairs.