June 24, 2025
If you’re thinking about buying your first home, you’ll want to consider your options carefully, compare lenders, and compare loan products. No two home loans are exactly alike, and many borrowers find that some mortgage loan options are better for their circumstances than others.
We examine some of the similarities and differences between FHA loan FICO score requirements and other types of home loans. Is an FHA mortgage right for you? Or do you qualify for other options in addition to an FHA mortgage?
True or false? Your credit score is usually the first thing lenders check when you’re buying your first home.
True! Your credit score is often the first thing lenders check. This highlights the importance of your credit score in the initial stages of applying for a home loan.
True or false? Conventional, FHA, and other home loans always have the same FICO score requirements.
False. Conventional, FHA, and other home loans may have different FICO score requirements depending on circumstances, the market, and other variables.
True or false? FHA loans tend to have more forgiving credit requirements because they are guaranteed by the federal government for the lender.
True. FHA loans tend toward more forgiving credit requirements (as do other government-backed mortgages) because they have a federal government guarantee for the lender.
True or false? Conventional lenders offering conventional mortgages take on less risk than FHA lenders.
False. Conventional lenders offering conventional mortgages take on more risk. Because of this, they typically require a higher FICO score.
True or false? A conventional lender may prefers a FICO score of 680 or higher to offer the most competitive rates and terms.
True. Conventional lenders may look for a FICO score of 620 or better on paper, but many prefer 680 or higher to get the most competitive rates and terms.
True or false? Your unique financial situation and debt repayment history have little bearing on loan offers once your credit score is known.
False. Much depends on your unique financial situation, including your debt load and your history of debt repayment.
True or false? FHA loans are primarily designed for experienced homeowners with excellent credit.
False! FHA loans are designed to be easier to qualify for, especially for first-time buyers or those with less-than-perfect credit.
True or false? To qualify for an FHA loan with a 10% down payment, your FICO score can be as low as 500.
True. You might still qualify if your score is between 500 and 579, but this requires a 10% down payment.
True or false? The Department of Veterans Affairs (VA) sets a strict minimum FICO score of 620 for all VA loans.
False! The Department of Veterans Affairs (VA) does not set a minimum credit score requirement. Lenders offering VA loans typically set minimum credit score standards, often around 620 to 660.
True or false? For a VA loan, a lender focuses primarily on your credit score, rather than your overall financial picture.
False. The VA focuses more on a borrower’s overall financial picture, including residual income, rather than just a credit score.
True or false? The U.S. Department of Agriculture (USDA) explicitly states a minimum FICO score of 640 for all its loans.
False. The U.S. Department of Agriculture (USDA) also does not have a government-imposed minimum FICO score range. Instead, USDA defers to the lender.
True or false? Talking to a participating FHA lender can be helpful if you are buying a home for the first time or after financial difficulty.
True! Talking to a participating FHA lender about buying a home for the first time or after financial difficulty can help you learn more about your most realistic options.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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