According to the "Washington Post," Fannie Mae raised its minimum credit score for conventional loans in 2009 from 580 to 620. Even if you have a 20-percent down payment, you can be rejected if your score is below 620. Fannie Mae will also reject a loan if more than 45 percent of your income goes toward paying debt.
FHA recently changed its minimum credit score to 520=580 , which qualifies you for lending programs that require only a 3.5 percent down payment.
VA loans are 100-percent financed and set aside for active and retired military, along with their families. There is no minimum credit score to qualify, though a better credit score will get you a better interest rate. Typically to get approved on A VA loan, you will need a 620 mid score with no bankruptcies or foreclosures in last 2 years with clean credit since BK or Foreclosures.
The better your score, the better your interest rate is likely to be. If your score is between 620 and 639—considered a risky score by some creditors—you could pay an interest rate of 5.718 percent on a $300,000, 30-year conventional mortgage. As of mid-August, 2010, If your score is at the high end, 760 to 850, your interest rate could be 4.129 percent on the same loan. A score of 650 may net you a rate of 5.172 percent.
USDA Home Loan Debt Ratio Waivers will be considered when the borrower has a middle credit score of 640 or higher, and the co-borrower has a credit score of at least 640.
If borrowers have credit scores of 640 or below, additional compensating factors will need to be documented for the USDA Home Loan Underwriters.
Resources for this article are below:
Minimum Credit Score Needed to Buy a House in Kentucky and get a Mortgage backed by FHA, VA, USDA, Rural Housing Loans, Fannie Mae