According to data from the most recent Origination Insight Report by Ellie Mae, the average FICO score on closed loans hit 753 in February 2021, up one point from the month prior. Additionally, the report shows that the time to close a loan fell in February.
The average time to close a purchase loan dropped to 53 days in February, down from 57 days in January
Keeping Current Matters warns that if buyers have a credit score below 750, it may harder to secure a loan—though not always the case. The blog highlights tips to consider, including:
- Federal Housing Administration (FHA) loans: With a 3.5% down payment, homebuyers may be able to get an FHA loan with a 580 credit score or higher. If you can manage a 10% down payment, though, that minimum goes as low as 500.
- Conventional loans: The most popular loan type typically comes with a 620 minimum credit score.
- S. Department of Agriculture (USDA) loans: In general, lenders require a minimum credit score of 640 for a USDA loan, though some may go as low as 580.
- S. Department of Veterans Affairs (VA) loans: VA loans don’t technically have a minimum credit score, but lenders will typically require between 580 and 620.