If you have a low credit score, you may be wondering if homeownership is possible. The short answer? Yes, you can buy a home with a low credit score. But the real question is… should you? That depends on your financial situation, loan options, and long-term goals.

What is the Minimum Credit Score to Buy a Home?

A common question many buyers ask is: “What’s the lowest credit score I can close with?”

• FHA loans allow you to qualify with a credit score as low as 580. However, this typically comes with higher interest rates, increased closing costs, and additional lender fees.
• To secure better loan terms and lower costs, a 620 credit score is recommended for FHA loans.
• Conventional loans typically require at least a 620–640 credit score, while VA and USDA loans may have more flexible requirements.

When Should You Buy with a Low Credit Score?

There are scenarios where it makes sense to buy a home even if your credit score is lower than ideal:

• You need stable housing, and rent is becoming unaffordable.
• Your credit score is expected to improve soon. Once your score increases, refinancing could help you secure better terms.
• You have strong financial reserves. If you can handle the higher mortgage costs and plan for future refinancing, buying now may still be a good move.

When Should You Wait to Buy?

If you can improve your credit before purchasing a home, it may save you thousands of dollars over the life of your mortgage. It may be best to wait if:

• You need time to build your credit and qualify for lower interest rates.
• You are managing high debt that could affect your mortgage payments.
• You need to save more for a down payment and closing costs.

Your Best Path Forward

If you have a lower credit score and are unsure if now is the right time to buy, the key is having a plan. Sometimes, it’s better to purchase now and refinance later. Other times, waiting could be the smarter move. 

Evaluating your financial situation, loan options, and long-term goals will help you determine the best path forward. No matter where your credit stands today, with the right strategy, homeownership can still be within reach.