I just stumbled across something interesting today. Apparently, you can technically qualify for an FHA loan with a credit score as low as 500...but there's a catch (isn't there always?). You'd need to put down at least 10% instead of the usual 3.5%. Honestly, I had no idea it could even go that low—I always assumed anything below 620 was basically a no-go zone. Curious if anyone else has heard differently or knows someone who's actually gotten approved with a score that low? Seems kinda risky, but hey, homeownership dreams are real...
My lender actually mentioned something similar when I was first shopping around. He said technically you can qualify around 500, but realistically most lenders have their own overlays that bump that minimum up quite a bit. When I applied, my score was hovering just below 600, and even then they were pretty hesitant until I got it above 620. So yeah, while it's possible on paper, in practice it seems pretty tough to pull off...
Yeah, that's pretty consistent with my experience too. When I refinanced a couple years back, my score was around 610, and even though the official guidelines said I could qualify, lenders were definitely cautious. They explained that lower scores usually mean higher risk, so they offset that with tighter overlays or higher rates. Took me a few months of careful credit management to hit 640, and suddenly the process became way smoother. Seems like mid-600s is the sweet spot for most lenders to feel comfortable.
"Seems like mid-600s is the sweet spot for most lenders to feel comfortable."
Hmm, I get what you're saying, but isn't it possible that some lenders might be more flexible? I've heard of friends getting approved with scores even lower than 600 through FHA loans or smaller local banks. Maybe it's not just about the score itself but also the overall financial picture—like debt-to-income ratio or employment stability? Curious if anyone's had luck going that route instead...
