Conventional loans below 620 credit: the paths most guides leave out.
620 is the usual line for a conventional loan, but it isn't a wall. Bring enough down payment or enough equity and a few doors stay open below it. Here they are, with our actual numbers.
- Below 620, buying a home you'll live in: 20% down.
- Below 620, buying a rental: 30% down.
- Below 620, refinancing: you owe less than 65% of what the home is worth if you live in it (more is fine in California); on a rental, the new loan stays within 50% of value.
- From 620 up: as little as 3% down for a first-time buyer, and mortgage insurance that goes away.
- Available in all 35 states + D.C. where Arran is licensed.
- No hard credit pull to see your options.
Rather just talk? Call or text us at (949) 401-7593
By Arran Amorozo, NMLS #1491497 · West Capital Lending, Inc. · Content last reviewed:
The short answer
Often, yes. Below 620, a conventional purchase can still happen with 20% down on a home you'll occupy or 30% on a rental, and a refinance of the home you live in can happen when you owe less than 65% of its value (in California, more is fine), or on a rental up to 50% of value. If you fall outside all three, FHA or a Home Equity Investment is usually the better move.
The 620 line, and three ways under it
Buying a home you'll live in
Below 620, a purchase can go ahead when you put 20% or more down. A bigger stake in the home offsets the score, and at 20% down you skip mortgage insurance entirely.
Buying a rental
Below 620, an investment purchase works with 30% or more down.
Refinancing
Below 620, on the home you live in, what you owe today must come in under 65% of the home's value, wherever Arran is licensed. At or over that line, a home in California can still refinance; anywhere else conventional is a clear no, and the next stop is usually FHA, or a Home Equity Investment in AZ, CA, CO, FL, OH, OR, PA, TN, UT & WA. On a rental, the new loan itself has to fit within 50% of value.
The program in plain numbers
| Term | Conventional |
|---|---|
| Standard minimum credit | 620 |
| Down payment at 620+, home you live in | From 3% for first-time buyers; 5% for repeat buyers |
| Down payment at 620+, rental | 20% |
| Below 620, buying a home you'll live in | 20% down |
| Below 620, buying a rental | 30% down |
| Below 620, refinancing | Home you live in: balance under 65% of value (higher in California) · Rental: new loan up to 50% of value |
| Cash-out refinance at 620+ | Up to 80% of value on a home you live in · 75% on a rental |
| Rate-and-term refinance at 620+ | Up to 95% of value on a home you live in · 75% on a rental |
| Mortgage insurance | Only above 80% loan-to-value. Ask to remove it at 20% equity; it ends on its own at 22%. |
| Loan limits | The conforming limit for your county, set each year by the FHFA |
| Where | In all 35 states + D.C. where Arran is licensed |
What that looks like in dollars
Buying a $350,000 home below 620: 20% down is $70,000, and the loan is $280,000, with no mortgage insurance. The same purchase as a rental takes 30% down: $105,000.
Refinancing a $500,000 home you live in below 620: your balance has to be under $325,000. Owe $300,000 and you're inside the line; owe $340,000 and conventional is off the table, unless the home is in California. A $500,000 rental can refinance below 620 with a new loan of up to $250,000.
Why the mortgage insurance matters
Conventional mortgage insurance has an end date. With 20% down there's none to begin with; with less, you can ask to drop it once you reach 20% equity, and it falls off by itself at 22%. FHA plays by different rules: its annual premium lasts for the life of the loan when you put less than 10% down, and 11 years even when you put down more.
That's why someone who could go either way often pays less over the years with conventional, and why a lot of FHA borrowers switch to conventional once their credit and equity catch up. We price both for your scenario and show you the difference.
When conventional isn't the answer
If you owe 65% of the home's value or more, conventional can't refinance the home you live in below 620, unless it's in California. FHA refinances are still considered below 620 (from HUD's 500 floor), and if you live in the home, a Home Equity Investment can work in AZ, CA, CO, FL, OH, OR, PA, TN, UT & WA with credit from 500.
Buying below 620 with less than 20% to put down? Conventional and FHA both ask 20% (FHA from HUD's 500 floor). If you've served, VA asks 10%.
Common questions
Is a conventional loan possible with a score under 620?
In specific cases: buying a home you'll occupy with at least 20% down, buying a rental with at least 30% down, refinancing the home you live in when you owe less than 65% of what it's worth (more is fine in California), or refinancing a rental with a new loan up to 50% of its value. Otherwise FHA or a Home Equity Investment usually fits better, and we can do either.
Conventional or FHA: which should I choose?
When both are open to you, conventional tends to come out ahead on mortgage insurance, since it ends. FHA is easier on a bruised credit history and still considers refinances below 620. We quote both and show you where one passes the other.
What will I need for a down payment as a first-time buyer?
At 620+, as little as 3% on a home you'll live in, and 5% if you've owned before. Below 620, it's 20%.
How do I get rid of PMI?
Put 20% down and you never have it. Otherwise, you can ask the servicer to drop it at 20% equity, and it ends automatically at 22% equity, measured against the original value.
How much cash can a conventional refinance pull out?
At 620+, up to 80% of the value on a home you live in and 75% on a rental. Below 620, the home you live in needs your balance under 65% of value first (higher in California), and on a rental the new loan stays within 50% of value.
What is the conventional loan limit?
It's the conforming loan limit for your county, which the Federal Housing Finance Agency sets each year, with higher limits in high-cost areas. We check your county's current figure on the call. Loans above that limit move into jumbo or non-QM programs.
Does checking my options affect my credit score?
No. We look at your options with a soft credit check, which has no effect on your score. A hard check only happens later, with your OK, if you decide to apply.
See your real numbers in 60 seconds.
The quiz on our conventional page checks your scenario against our lending rules in about a minute. No hard credit pull, and your information is never sold.
Check my conventional options →Rather just talk? Call or text us at (949) 401-7593
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