There is a difference between what the programme requires and what a lender will do. Confusing the two is why people think they cannot get a mortgage when they can.
The most useful thing to understand about mortgage credit scores is that two different things get called a "minimum".
A programme requirement is set by the loan programme — FHA, VA, Fannie Mae, Freddie Mac, USDA. It is published and it applies everywhere.
A lender overlay is an additional requirement a lender adds on top, to manage its own risk. It is not published, it varies between lenders, and it is the source of almost every credit score figure quoted online.
If a lender declines you, ask which of the two it was. If it is an overlay, another lender may say yes on identical facts.
The VA sets no minimum credit score. Its requirement is that you "meet our — and your lender's — standards for credit, income."
Every VA credit score number you have seen — 580, 600, 620, 640 — is a lender overlay. This is the single biggest gap between programme rule and market practice in US mortgage lending, and it is worth knowing if you are a veteran who has been declined.
USDA is equally explicit in its own training material: "USDA does not have a specific minimum Credit Score" and "USDA does not use a single minimum credit score."
Applications run through GUS, the automated underwriting system, which returns Accept, Refer, or Refer with Caution. A Refer goes to manual underwriting rather than being declined.
The widely repeated 640 figure does not appear in the USDA documents we checked. The accurate framing is: USDA sets no minimum; 640 is roughly the level at which most lenders and GUS treat a file as a straightforward automated approval. Below it, expect manual underwriting and lender overlays — not an automatic no.
For loans underwritten through Desktop Underwriter, there is no minimum credit score. DU assesses creditworthiness holistically across the whole file.
Manually underwritten loans do have minimums: 620 for fixed-rate and 640 for adjustable-rate, varying by loan purpose, loan-to-value, debt-to-income ratio and number of units per the Eligibility Matrix.
Where there are multiple borrowers, the average median credit score is used. Exceptions exist for files where no borrower has a score, for HomeReady with one low-score borrower, and for high-LTV refinances.
We could not verify Freddie Mac's minimum scores against a primary source. The Home Possible product page advertises "credit flexibilities" but publishes no minimum score, and the commonly cited 620 and 660 manual-underwriting figures were not confirmed. Check the Freddie Mac Selling Guide rather than relying on a secondary number.
FHA does publish tiers:
| Decision credit score | Maximum LTV | Minimum down payment |
|---|---|---|
| 580 or above | 96.5% | 3.5% |
| 500 – 579 | 90% | 10% |
| Below 500 | Not eligible | — |
These are long-standing Handbook 4000.1 policy. HUD's own answer pages would not load when we checked, so verify against the current Handbook if the exact tier matters to your case.
A lender that originates a loan usually sells it, and it carries repurchase risk if the loan defaults early or was underwritten incorrectly. Overlays are how lenders manage that. They tighten in uncertain markets and loosen in competitive ones.
The practical consequence: shop more than one lender, and prefer lenders with high volume in your specific programme. A lender that closes VA loans every week is more comfortable at the edges of VA's actual rules than one that does a handful a year.
A score is one input. Underwriting also weighs:
A borrower with a 780 score and a 55% debt-to-income ratio can be declined where a 620 with a 30% ratio is approved.