In 2026, as mortgage rates hover around 6% (with the latest Freddie Mac survey pegging the 30-year fixed at 6.09% as of mid-February, and some lenders dipping sub-6% for top-tier borrowers), the dream of homeownership remains elusive for many amid still-elevated prices and lingering affordability crunches. But here’s the dirty little secret the mainstream mortgage industrial complex won’t scream from the rooftops: you don’t need god-tier credit to buy a house anymore—thanks to recent rule changes.

The big news? Fannie Mae and Freddie Mac— scrapped their hard minimum credit score requirements for conventional loans in late 2025. No more automatic 620 cutoff. Instead, approvals now hinge on a “holistic” view of your financial profile: reserves, down payment size and debt loads.

Minimum Credit Score Thresholds by Loan Type in 2026

Conventional (Conforming): No federal floor since the 2025 changes, previously conventional loans required at least 620. Scores 720+ unlock the best rates & terms and also benefit from lower PMI.

FHA Loans: A popular option for 1^st time home buyers. 580+ gets you the standard 3.5% down; scores 500–579 require 10% down. Still wildly popular in places like North Carolina’s suburban sprawl, where first-timers flock to lenient DTI and credit rules.

• VA Loans (vets, active duty, eligible spouses): No official VA minimum, but some draw the line at 500. 
• USDA Loans (rural/suburban pockets, including swaths of Wake County): No government minimum, but lenders usually want prefer a 620+. Great for those avoiding city premiums.

How Your Score Really Hits Your Wallet in This “Stabilizing” Market

Higher scores = free money saved. With rates in the mid-5% to low-6% range for the elite:

• 800+ (Exceptional): Prime territory—often the absolute lowest available (think ~6% or sub for top borrowers).
• 740–799 (Very Good): Excellent terms, reduced PMI
• 670–739 (Good): Still solid, rates less than 6% for FHA borrower. 
• 580–669 (Fair): FHA/VA territory mostly; expect to pay up in rates and fees.
• Below 580 (Poor): FHA is your top choice

Real-world averages for approved borrowers tell the tale: conventional approvals cluster around 755 FICO, FHA around 676, VA near 720. A mediocre score can easily add tens of thousands in extra interest over 30 years.

What Lenders Actually Obsess Over (Beyond Your FICO Fetish)

Credit’s only 35% of the FICO pie (payment history) + 30% (utilization). The rest? Your full dossier under Ability-to-Repay regs:

• DTI ideally under 43–50% (some stretch higher with compensating factors).
• Bigger down payment/equity = lower risk (and rates).
• Stable job/income history.
• Actual cash reserves (2–6+ months of payments—lenders love buffers).
• Credit history length, mix, recent inquiries.
• Red flags: recent delinquencies, collections, foreclosures, utilization >30%.

Even a decent score tanks if you’ve got credit events.

Quick-and-Dirty Ways to Juice Your Score Before Diving In

1. Pay everything on time—35% of your score lives here.
2. Hammer down revolving debt—keep utilization <30%.
3. No new credit lines—hard inquiries sting (though mortgage shopping within 45 days usually counts as one).
4. Don’t close old accounts—age helps.
5. Scrub errors—free weekly reports at AnnualCreditReport.com; dispute the junk.
6. Thin file? Build it with secured cards or rent reporting (some lenders bite).

Start 3–6 months early for real impact.

The Cynical Bottom Line for 2026 Buyers

You don’t need an 800 to buy—FHA opens the gates at 500–580, and the GSEs’ “no minimum” pivot signals more flexibility.  But chasing 700+ still saves serious coin.

Get pre-approved early, know your real buying power, and strengthen those offers. If your credit score’s need improvement, focus on the low-hanging fruit: kill debt, stay current.