How much of a home loan can I get with a 640 credit score?

A 640 credit score falls under the range of a fair FICO® Score (580-669) and VantageScore® (601-660). Usually, home loans are available for every kind of credit score; only the terms and conditions that go along with approving the loan will differ.

The best option with a 640 credit score is to opt for a government-insured loan.

FHA loans are insured by the Federal Housing Administration and are good for anyone with a minimum score of 580. They are especially popular with first-time home buyers and people with bad credit. You will, however, need to put down a 3.5% down payment for the house. These loans generally have mortgage insurance – which is an additional fee that protects the lender in case a person falls back on their mortgage payments

Veterans Affairs (VA) loans are only for veterans, surviving spouses, or active service members. There is no minimum score set by the U.S. Department of Veterans Affairs because it is not a lending agency per se. VA-backed lenders have their own individual criteria and credit score requirements for qualification. There are no down payments or insurance costs with this loan.

United States Department of Agriculture (USDA) loans are only applicable for property purchased in an eligible rural area. These loans require a minimum score of 620 to qualify.
You can also apply for a conventional loan, which also has a minimum credit score requirement of 620. But, the lower your score, the higher your interest rates. Since these loans are not government-insured, lenders can set their own minimum scores.

Your credit score is only one factor that decides whether you qualify for a loan. Lenders will look at your past payment history, income, employment status, and bank balance before deciding whether to approve your application.

It is always a good idea to build your credit score to reach a “good” or “very good” range and build your savings. Along with higher interest rates, some of these loans require a minimum down payment. Buying a home is a major commitment so take the time to review the available offers and make sure you are in a healthy financial position before applying.