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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Bad credit does not automatically rule out a U.S. mortgage, but no single lender is the best choice for every low-score borrower. For many buyers, the first step is an FHA loan, which allows lower scores with a larger down payment. VA loans are worth comparing if you are an eligible servicemember, veteran, or qualifying surviving spouse, and USDA loans may fit buyers who meet location and income limits. Every lender can then set stricter minimums of its own, so the lender you choose matters as much as the loan program. The figures below reflect reporting from early October 2026.
Which loan type to test first
Start with eligibility, then compare actual offers from more than one lender.
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- If you qualify for VA benefits, compare VA offers first. The VA sets no minimum credit score, and the lenders you talk to set their own. See the veteran section below.
- If the home is in a USDA-eligible location and your household income is within the program limit, check USDA. It can allow no down payment, but property and income rules apply.
- Otherwise, FHA is usually the first stop. NerdWallet lead writer Abby Doyle writes: “In most cases, FHA loans will be your best place to start.” That is editorial guidance from her 2026 comparison. Whether FHA is your best option still depends on your eligibility and the offers you actually receive.
- Conventional loans typically start around a 620 score at lenders, with exceptions, so they are usually a fit once your score is in that range or higher.
Lenders with reported low FHA minimums
NerdWallet’s 2026 comparison reports the following FHA minimum scores for the lenders it reviewed. These are thresholds the lender is reported to use. They are not a promise of approval, and lender standards can differ even for the same loan type.
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Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →| Lender | Reported FHA minimum score | Notes from the sources |
|---|---|---|
| CrossCountry Mortgage | 500 | NerdWallet flags higher FHA rates or fees than competitors |
| Carrington | 500 | NerdWallet flags higher FHA rates or fees than competitors |
| Newrez | 500 | Not stated in NerdWallet’s 2026 comparison |
| Lower | 500 | Not stated in NerdWallet’s 2026 comparison |
| Guild | 540 | NerdWallet says it serves a range of FHA borrowers; Yahoo Finance describes an alternative-credit approach |
| Real Genius | 580 | NerdWallet describes a detailed online rate tool |
| Rate | 580 | Not stated in NerdWallet’s 2026 comparison |
A low minimum does not make a lender the cheapest option. CrossCountry and Carrington accept a 500 score but are flagged for higher FHA rates or fees, which can outweigh the lower threshold once you compare total cost.
Lenders named in Yahoo Finance’s September 2026 roundup
A Yahoo Finance roundup dated September 30, 2026 names PNC, Pennymac, Guild, Rocket Mortgage, and New American Funding across categories that include FHA loans, military-connected applicants, alternative credit, renters, and borrowers with a prior bankruptcy or foreclosure. The full text could not be checked against each lender’s own materials for this article, so treat these names as a shortlist to verify. Confirm exact score floors, state availability, grant programs, and pricing directly with the lender.
How the main loan programs compare
| Program | Score guidance reported | Down payment and insurance | What to confirm |
|---|---|---|---|
| FHA | 3.5% down at a 580 or higher; 10% down for scores of 500–579 (NerdWallet, 2026; also summarized by Navy Federal Credit Union, 2026) | Mortgage insurance applies, including upfront and annual premiums | Lender overlays above the program minimum; full APR and closing costs |
| VA | No minimum set by the VA. Navy Federal reports a typical lender minimum of 620 that varies by lender (2026). Rocket Mortgage reports its own VA minimum as 580 (article dated September 5, 2026) | No down payment and no monthly mortgage insurance are common features; a funding fee may apply unless you are exempt | Eligibility, occupancy, debt, income, residual income, and the funding fee or exemption |
| USDA | Commonly around 640 or higher, varying by lender (Navy Federal Credit Union, 2026) | May allow no down payment | Property location, household income limits, and the lender’s score standard |
| Conventional | Typically 620 or higher, with exceptions (Navy Federal Credit Union, 2026; NerdWallet, 2026) | Down payment and private mortgage insurance depend on the loan and your equity | Total monthly cost, including private mortgage insurance |
Veteran and military-connected borrowers
Because the VA does not set a score floor, the number you see in a lender’s materials is that lender’s own overlay. A lender at 580 and one at 620 can both be VA lenders, so ask each one for its minimum in writing. VA eligibility is separate from lender approval. Confirm your entitlement with a Certificate of Eligibility before you compare VA offers, and ask how the lender evaluates residual income, which is part of VA underwriting.
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What lenders weigh besides your score
Credit is one part of underwriting. The sources identify these factors as relevant:
- Debt-to-income ratio
- Stable, documented employment and income
- Savings or reserves
- Down payment size
- Payment history, including recent late payments
- Residual income, for VA loans
- Any prior bankruptcy or foreclosure, and how long ago it occurred
Lenders commonly use the middle of the bureau scores they pull. Navy Federal Credit Union describes using the middle score and, when there are co-borrowers, often the lower middle score. Exact treatment varies by lender.
How to compare offers side by side
- Choose one purchase price, down payment, loan type, discount point count, and rate lock period, then use the same figures with every lender.
- Request a written Loan Estimate from each lender. Compare the APR, origination and other closing costs, and mortgage insurance or program fees such as FHA mortgage insurance or the VA funding fee. Do not compare advertised rates without points and fees.
- Ask each lender for its minimum score for your specific loan type and whether it applies overlays above program rules.
- Confirm state availability, any down payment assistance or grant programs, and the conditions attached to them.
- Before committing, speak with a HUD-approved housing counselor, which may be free or low-cost, about readiness and assistance options. Counseling does not guarantee approval.
What these figures do not tell you
The numbers in this article are lender and program thresholds reported by the sources, not statistics about approval rates. The sources do not report how often applicants with low scores are approved. A minimum score tells you where to start asking, not whether you will qualify, and no rate applies to you until a lender gives a dated quote based on your own credit file.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Source dates and limits
- NerdWallet’s 2026 lender comparison is the most detailed source for lender-level score minimums and trade-offs. Its values are editorial reports and change over time, so reconfirm them with each lender.
- Navy Federal Credit Union’s October 1, 2026 explainer offers a side-by-side program overview, but it is educational content published by a lender.
- Rocket Mortgage’s September 5, 2026 article is the primary source for Rocket’s own VA minimum. Its broader market claims are secondary.
- Yahoo Finance’s September 30, 2026 roundup is useful for lender names and categories only, because its full text could not be verified.
None of these sources establishes an individual quote, a rate, or an approval.
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