The Quick Read: The old “you need a 620” rule no longer describes how most conventional files are approved. Fannie Mae removed its minimum score from its automated system, and Freddie Mac does not require a minimum score for its automated “Accept” findings. But the wholesale programs Lendmire places files with generally start at a 620 decision score, and the score you carry still changes what the loan costs. Think of it as three layers: agency eligibility, lender overlays, and pricing.
Key Takeaways
- The automated finding governs most conventional files. The system weighs your whole credit report, not one number.
- Manual underwriting still has score floors: 620 on a fixed rate, 640 on an adjustable rate.
- Lenders can add their own minimums, called overlays. An agency approval does not force any lender to make the loan.
- A lower score usually means higher pricing and higher mortgage insurance cost, even when the loan is approved.
- You carry many scores, not one. The one your lender uses may differ from the one in your phone app.
What Is a Conventional Loan, and Who Sets the Rules?
A conventional loan is a mortgage that is not backed by a government agency like FHA or VA. Most follow the rules of Fannie Mae and Freddie Mac, the two companies that buy mortgages from lenders. Their regulator is the FHFA.
Conventional payment estimate
The starting figures are an example price at the first-time buyer’s minimum down payment. Replace them with yours.
Editable benchmark: 7.32% as of October 22, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a conventional loan quote.
Estimate seeded at the low end of Fannie Mae’s published range (0.58%–1.86% a year); the insurer prices the actual premium on the score and the leverage. Applies only above 80% loan-to-value.
Illustrative starting assumptions: a $350,000 price, the first-time buyer’s minimum down payment, a thirty-year term at the current Freddie Mac benchmark, mortgage insurance at the low end of Fannie Mae’s published range, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a conventional loan quote; your rate is set by the lender at lock. The mortgage insurance figure is an editable estimate seeded from Fannie Mae’s published typical range, not a premium quote; the insurer prices the actual premium, and the cancellation month assumes scheduled payments with no extra principal and no change in value. Taxes, insurance and dues are editable estimates; closing costs are not included. Conforming loan limits apply by county. Licensed in sixteen states for consumer mortgages.
That matters because lenders write loans they can sell. So the agencies’ guidelines shape almost every conventional file. Lendmire is a mortgage broker, so it arranges these conventional loan programs through wholesale lenders rather than lending directly. Everything below is subject to lender guidelines and full file review. None of it is a commitment to lend.
For a purchase, the headline structure is simple. A one-unit primary residence with a fixed rate can go to 97% loan-to-value (LTV, meaning the loan as a share of the home’s value) when at least one borrower is a first-time buyer. That is 3% down. Otherwise the standard is 95% LTV, or 5% down. Two- to four-unit primary residences also reach 95%. Second homes top out at 90%. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The Credit Score Requirement in Three Layers
The score requirement is not one number. It is three separate tests, and borrowers get confused when they blend them.
| Layer | What it decides | Who sets it |
|---|---|---|
| Agency eligibility | Can the loan be sold at all? | Fannie Mae, Freddie Mac |
| Lender overlay | Will this lender make it? | The lender |
| Pricing | What does it cost? | Risk-based adjustments |
Layer one: agency eligibility. Fannie Mae’s Desktop Underwriter used to require a 620 minimum. Per Fannie Mae’s Selling Guide announcement SEL-2025-09, that minimum was removed for new casefiles created on or after Nov. 16, 2025. In its place is a minimum credit risk standard built from the system’s evaluation of the full file.
Freddie Mac works the same way for its automated findings. Under Freddie Mac Guide Section 5203.2, no minimum Indicator Score is required for Accept mortgages, because Loan Product Advisor has judged the borrower and the loan acceptable.
Layer two: the lender overlay. An overlay is a lender’s own rule that is stricter than the agency’s. Across the wholesale programs Lendmire works with, conventional files generally start at a 620 decision score. The automated finding governs most files, with a total debt-to-income ceiling of 50%. Some lenders set a higher floor. That is why one lender can say yes and another no on the same file.
Layer three: pricing. Approval and affordability are different questions. Scores below certain bands raise the cost of the loan even when everything else checks out. More on that below.
Does “No Minimum” Mean Anyone Gets Approved?
No. Fannie Mae still pulls credit scores on every borrower and still assesses your credit history. Removing a hard floor means the system looks at the whole picture instead of cutting you off at one line.
A weak file can still fail on a recent late payment, high card balances, or a collection. And a lender overlay can decline a file the agency system would accept. Wholesale lenders, in our experience, tend to hold the 620 line even where the agency has dropped it. So treat 620 as a practical starting point, not a legal guarantee either way.
When Manual Underwriting Applies
Some files do not get an automated approval. Maybe the system returns a refer finding, or the credit file is unusual. Then a human underwriter reviews it by the book.
The floors for these loans are in Fannie Mae’s Selling Guide topic B3-5.1-01. They are 620 for fixed-rate loans and 640 for adjustable-rate loans. The Eligibility Matrix then raises requirements as LTV, unit count, and debt-to-income climb.
On the wholesale side, manually underwritten loans carry ratio limits of 36% or 45%, with the reserve and score factors the Eligibility Matrix sets. Reserves are the savings left over after closing. The matrix layout is dense, so read the matrix itself rather than relying on a summary of its cells. The pattern is easy to state: more risk elsewhere in the file means a higher score is needed.
Which Credit Score Does the Lender Actually Use?
Your lender uses a mortgage-specific score, and it is probably not the one in your banking app. The CFPB explains that a person does not have just one credit score. Each score depends on the data and the model behind it. Most range from 300 to 850.
Here is how the pull works in practice:
1. The lender requests a merged credit report with scores from all three bureaus: Equifax, Experian, and TransUnion. 2. The lender picks the score model. Classic FICO has been the baseline for years. FHFA’s credit score page says VantageScore 4.0 is now open to all approved lenders without prior written approval, as of Sept. 9, 2026. 3. The system picks your representative score from the three. With one borrower, that is a middle-score approach. We describe it generally here because the details live in the Selling Guide. 4. With more than one borrower, Fannie Mae uses the average median score across borrowers. 5. The file runs through automated underwriting.
Trade press reports that Classic FICO is still required for manually underwritten loans, and that lenders must use one model for all borrowers on a loan. Treat that as a reported detail and confirm it with your loan officer.
A practical point: because lenders use different scores, you might qualify with one lender and not another. And the number on a free app may be several points off the number your lender sees.
How Your Score Changes What You Pay
A higher score and a larger down payment generally mean a smaller pricing adjustment. A lower score and a smaller down payment generally mean a bigger one.
Two mechanisms do the work.
Loan-level price adjustments. These are risk-based charges applied to loans sold to Fannie Mae and Freddie Mac. They apply after eligibility. Fannie Mae’s capital markets team announced that these adjustments are now aligned across Classic FICO and VantageScore 4.0, effective for loans purchased on or after Oct. 1, 2026. The adjustment grid varies by score band, LTV, occupancy, and loan features. This article does not reproduce cells, since the grid changes.
Mortgage insurance. Mortgage insurance (MI) is a policy that protects the lender when you put down less than 20%. It is required above 80% LTV. Published typical annual premiums run from 0.58% to 1.86% of the loan balance. That is a range, not a quote. Where you land in it depends on your score and your down payment. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Here is the good news on MI. You can request cancellation when your balance reaches 80% of the home’s original value, assuming good payment history, no second liens, and no drop in value. The servicer must end it automatically at 78%. That comes from the Homeowners Protection Act.
A Worked Comparison
Picture two buyers purchasing identical homes with 5% down. One has a score in the high 700s. The other sits just above 620. Both can be eligible. But the second buyer will usually see a larger pricing adjustment and a higher MI premium within that published range. The loan works, but the monthly budget and the upfront cost both run heavier. Same house, same approval, different bill.
Now change one input. Say the second buyer has a larger down payment. The LTV drops, and both the adjustment and the MI cost usually ease. Score and down payment trade against each other.
What Else Lenders Review Alongside Your Score
Score is one input. The automated system also weighs the non-credit side of your application.
- Debt-to-income ratio (DTI). Your monthly debts as a share of income. The automated ceiling on the wholesale programs is 50%.
- Down payment. 3% for eligible first-time buyers, 5% on a standard purchase. Home Ready and Home Possible, the affordable-lending programs, also carry an income limit of 80% of area median income.
- Reserves. Savings left after closing. Manual files make this explicit.
- Income and employment history. Documented per the automated findings.
- Appraisal and property. The home must support the loan.
A strong DTI and healthy reserves can offset a middling score. A high score does not save a file with 50%-plus ratios. The system looks at the combination.
Where the General Rule Breaks
Credit events. Agency waiting periods apply after serious events. That is four years from a chapter 7 discharge, seven years from a foreclosure, and four years from a short sale or deed-in-lieu. Documented extenuating circumstances can shorten these. A score of 700 does not erase the clock.
Thin or no credit file. A borrower with no usable score is a different case from a borrower with a low score. Fannie Mae’s guide has a path for nontraditional credit history, and its automated system now flags when a lender must establish one. But a score that is merely low is not fixed by nontraditional credit. If you have a thin file, ask early whether the lender handles it.
Credit freezes. If your credit data is frozen at the bureaus, the lender cannot read it. Unfreeze before the pull. Do not wait for the lender to ask.
Co-borrowers. Adding a co-borrower does not simply borrow their stronger score. With two borrowers, the average median score is used, so a weak score can drag the representative number down. Under Freddie Mac’s Accept path, when not every borrower has a usable score, at least one must, and the deal must be a purchase or no-cash-out refinance, per Section 5201.1.
Occupancy and units. Second homes and multi-unit properties carry stricter requirements and heavier pricing. If you are buying something other than a primary residence, occupancy decides your leverage: second homes reach 90%, and that is where the conversation ends for this article.
Conventional vs. Government Loans: How to Decide
FHA, VA, and USDA are separate programs with their own rules. They are not conventional loans.
A conventional loan tends to fit when your score is solid, you can put down at least 3% to 5%, and you want mortgage insurance that cancels. An FHA loan tends to fit a lower score or higher DTI, though its insurance works differently. A VA loan fits eligible veterans.
If Your Score Is Borderline
Start with what moves a score. The CFPB lists the factors models weigh: bill-paying history, unpaid debt, number and type of accounts, account age, how much available credit you use, new applications, and collections, foreclosures, or bankruptcies.
In practice, borrowers near the line can work these in order:
1. Pull your reports and dispute errors. Mistakes on a report are fixable, and fixing them can lift a score.
2. Pay card balances down. Using less of your available credit is often the fastest lever you control.
3. Pay every bill on time. Payment history carries heavy weight, and it only improves with time.
4. Hold off on new credit. A new card or car loan adds inquiries and can lower your score right before or during the mortgage process.
5. Ask about rapid rescore. A lender can sometimes request an updated score after you pay down a balance or correct an error.
6. Consider timing. If the gap is large, waiting a few months to build history can cost less than buying now.
Shopping lenders is fine. Per the CFPB, multiple mortgage credit checks within a 45-day window are recorded as a single inquiry. Compare offers inside that window.
Key Terms Defined
Overlay: A lender’s own requirement that is stricter than the agency’s guideline.
Loan-level price adjustment (LLPA): A risk-based charge applied to loans sold to Fannie Mae or Freddie Mac, driven by score, LTV, and other factors.
Manual underwriting: A file reviewed by a person against fixed guidelines instead of receiving an automated approval.
Representative score: The single score the lender uses for you, drawn from your bureau scores.
Mortgage insurance: A policy protecting the lender when you put down less than 20%. It is required above 80% LTV and cancels as your balance falls. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Debt-to-income ratio: Your monthly debt payments divided by your monthly income.
Frequently Asked Questions
Is 620 still the minimum for a conventional loan?
Not as an agency rule for automated approvals. Fannie Mae removed its minimum from Desktop Underwriter, and Freddie Mac has no minimum for Accept findings. But manual underwriting still floors at 620 for fixed rates and 640 for adjustable rates. Wholesale programs generally start at a 620 decision score. Subject to lender guidelines.
Can I get approved with a score below 620?
Rarely, and it depends on the lender. The agency system may accept a file with a strong overall picture, but most wholesale lenders hold their own floor. If your score sits close to the line, a few months of cleanup often opens more doors than shopping around.
Does shopping for a mortgage hurt my score?
Very little if you do it in a tight window. Mortgage credit checks made within a short shopping window are typically recorded as a single inquiry, and the exact window varies by scoring model and lender. New credit cards and car loans are different. They add separate inquiries and can lower your score.
Why is my app score different from my lender’s score?
Because you have many scores. Different models and different bureau data produce different numbers. Lenders use mortgage-specific versions, and since VantageScore 4.0 is now allowed, the model your lender chooses may not match what you see on a consumer app.
Does a higher score lower my mortgage insurance?
Generally yes. Published typical annual premiums run from 0.58% to 1.86% of the balance, and a stronger score and larger down payment push you toward the lower end of that range. Insurance is required above 80% LTV, can be cancelled at 80%, and ends automatically at 78%.
If you are buying a home and want to see whether a conventional loan fits your file, Lendmire can help you compare the options and what each one asks of the file. For related reading, see Lendmire’s piece Will a Conventional Cash-Out Refinance Hurt Your Credit Score?.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide announcement SEL-2025-09
2. Freddie Mac Guide Section 5203.2
3. Fannie Mae Selling Guide B3-5.1-01, General Requirements for Credit Scores
4. CFPB: What Is a Credit Score
6. Fannie Mae, Simplified Pricing Across Credit Score Models
8. CFPB: What Exactly Happens When a Mortgage Lender Checks My Credit
This article is part of Lendmire’s conventional loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Waive Escrow on a Conventional Loan for a Primary Home? · Conventional Loan Appraisal Requirements for Home Condition · Does a High Credit Score Get You Better Conventional Loan Terms?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.