The published minimum credit score for a loan program isn't always the score you actually need. Here's the gap between program minimums and what lenders really require in 2026.
2026 Minimums by Loan Type
| Loan Type | Program Minimum | Typical Down Payment |
|---|---|---|
| FHA | 500 (10% down) / 580 (3.5% down) | 3.5%–10% |
| VA | No official minimum; lenders commonly require 580–620 | 0% (eligible veterans) |
| Conventional | 620 | 3%–20% |
Why the Real Number Is Often Higher
Program minimums come from the agencies that back these loans — HUD for FHA, the VA for VA loans. Individual lenders add their own "overlay" on top, typically 20 to 40 points above the program minimum, to manage their own risk. That's why a borrower with a 580 score might qualify for FHA on paper but get turned down by a specific lender before ever reaching that agency floor.
What This Means for Bad-Credit Applicants
A single lender's "no" isn't the final word — overlays vary widely, so the same credit profile can be declined by one lender and approved by another. This is exactly why comparing quotes across multiple lenders matters more for bad-credit applicants than for prime-credit ones.
Sources: FHA, VA, and conventional loan program guidelines as published by lending industry guides for 2026; individual lender overlay policies vary and are set by each institution.
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