To get a conventional loan in 2026, most lenders still want a credit score of about 620 or higher. You also need at least 3% down on a home you will live in, a debt-to-income ratio (DTI) that usually sits at or below 43% to 45%, two years of steady income, and a loan amount at or under $832,750 in most counties. If you clear those bars comfortably, especially with a score of 720 or higher, conventional is often the cheaper path. If your score sits in the low 600s or your debts run high, it may not be.

These numbers decide three things: whether you qualify at all, what rate and fees a lender quotes you, and how much you pay each month for mortgage insurance. Each one is below, along with what changed in the past year.

Two layers decide whether you're approved

A conventional application passes two checks, in this order.

First, the automated underwriting system. For Fannie Mae loans this is Desktop Underwriter (DU). It weighs your credit, debts, income and down payment together. Fannie Mae dropped its hard 620 minimum score for loans run through DU, effective November 2025, and Freddie Mac made a comparable change earlier in 2025. DU still evaluates a full set of credit risk factors. It no longer rejects a file on the score alone.

Second, the lender's own rules, called overlays. Lenders can be stricter than Fannie and Freddie, and most are. Analysts expect most lenders to keep minimums near 620. One broker source puts some overlays at 640 to 660, depending on your down payment and the property type. In practice, 620 is still the number to plan around. What the national rule allows, a given lender can still refuse.

The score itself can now come from more than one model. Since September 9, 2026, every Fannie and Freddie approved lender may use VantageScore 4.0 instead of Classic FICO without prior approval. The lender picks the model loan by loan, and everyone on the same application must be scored with the same one. The newer models can count on-time rent payments, which matters if your credit file is thin. Nothing in the sources shows how many lenders have switched yet, so ask which model yours uses.

The thresholds, side by side

Requirement Typical bar Where flexibility exists
Credit score 620 at most lenders No hard floor in DU; some lenders want 640 to 660
Down payment (home you live in) 5% standard 3% via Conventional 97, HomeReady or Home Possible
DTI Under 36% preferred; 43% commonly allowed Up to 50% in DU with a high score or cash reserves
Income history Two years, same employer or field Salary, bonus, commission, self-employment and more count
Loan amount (one unit) $832,750 in most counties Up to $1,249,125 in high-cost areas
Property 1 to 4 units, you live in one Condos generally need 51% owner occupancy

The 3% options have their own eligibility rules. HomeReady and Home Possible are aimed at eligible lower-income or first-time buyers. The sources here don't spell out the income caps or the Conventional 97 criteria, so confirm them with a lender before you count on 3%. For the loan limit, FHFA set the 2026 baseline at $832,750, up $26,250 from 2025. In Alaska, Hawaii, Guam and the U.S. Virgin Islands the baseline is $1,249,125. Borrow more than your county's limit and the loan becomes a jumbo loan, which falls outside these rules entirely.

Where the requirements show up in the price

Qualifying is only the first step. Your score and down payment also set your costs.

  • Rate and fee adjustments. According to one broker's breakdown, a score of 740 or higher gets the best pricing. Scores from 680 to 739 add adjustments of 0.25% to 0.75%. Scores from 620 to 679 add 1% to 2.5%, depending on how much you put down.
  • Private mortgage insurance (PMI). Any down payment under 20% requires PMI. It typically costs 0.25% to 1.50% of the loan a year, and a higher score and bigger down payment push it toward the low end. The PMI industry's trade group says premium rates have fallen 25% or more since 2017.
  • Getting PMI removed. You can ask to cancel PMI once your balance reaches 80% of the home's original value, and it ends automatically at 78%. On September 15, 2026, FHFA directed Fannie Mae to let servicers contact borrowers whose rising home value or paydown may qualify them for early cancellation. Freddie Mac already allowed this. Expect to need about 24 months of on-time payments and a new appraisal costing $500 to $700.

Not the same as FHA's rules

Two mix-ups come up often. First, conventional PMI is not FHA mortgage insurance. PMI can come off, while FHA uses a separate government system with an upfront premium and an annual premium. Second, the end of the national 620 floor is not the end of 620 in practice, because lender overlays still apply. If a score under 620 is what you're working with, the FHA qualification rules are the more realistic place to start. The full FHA and conventional comparison runs the total costs side by side.

Before you ask for a quote

Check your score against the tiers above. Every tier you move up lowers both your rate adjustment and your PMI. If you're sitting at 670 or 735, a few months of work may be worth real money, and raising your score before applying covers how.

Then gather two years of W-2s and tax returns, your recent pay stubs and your bank statements. Because overlays differ by lender, the same file can be approved at one lender and declined at another. When you talk to lenders, ask each one three questions:

  1. What minimum score and maximum DTI do you apply?
  2. Which credit score model will you use on my file?
  3. What will PMI cost me at 3%, 5% and 10% down?

Compare the answers across several lenders, not just the rates.