Yes, buying a house with a 590 credit score is realistic, and the clearest path is an FHA loan with 3.5% down. VA and USDA loans may also work if you qualify by service history or property location. The tradeoffs are real: mortgage insurance that typically lasts the life of the FHA loan, an interest rate roughly one to two percentage points above what prime borrowers get, and a slower approval that goes through a human underwriter rather than an automated system.
Why FHA Is the Main Option
The Federal Housing Administration insures mortgages for borrowers who don’t fit conventional guidelines. A 590 score sits comfortably above FHA’s 580 cutoff for the lowest down payment tier, which under federal law requires you to put down at least 3.5% of the home’s appraised value.1Office of the Law Revision Counsel. 12 USC 1709 – Insurance of Mortgages On a $300,000 home, that’s $10,500. The entire down payment can come from gift funds provided by family members, employers, or charitable organizations, as long as the donor signs a letter confirming no repayment is expected.
For 2026, FHA loan limits run from $541,287 in lower-cost counties to $1,249,125 in high-cost markets for a single-family home.2U.S. Department of Housing and Urban Development. FHA Announces 2026 Loan Limits Check your county’s specific limit before you start touring properties.
VA Loans for Eligible Veterans
If you’ve served in the military, a VA-guaranteed loan offers no down payment and no monthly mortgage insurance. The VA itself sets no minimum credit score.3Office of the Law Revision Counsel. 38 USC 3710 – Purchase or Construction of Homes In practice, most VA lenders impose their own floor around 620.4U.S. Department of Veterans Affairs. VA Home Loan Guaranty Buyers Guide
That doesn’t make 590 an automatic no. Some lenders work with veterans below 620, especially when other parts of the file are strong. Shopping around matters more here than anywhere else, because one lender will flatly decline while another may approve the same application. Look specifically for a VA-approved lender who handles manual underwriting.
USDA Loans in Rural and Suburban Areas
If you’re buying in a USDA-eligible area, the Guaranteed Rural Housing Program offers zero down and below-market rates.5eCFR. 7 CFR Part 3555 – Guaranteed Rural Housing Program Eligible areas include many small towns and outer suburbs people wouldn’t think of as rural. Your household income can’t exceed 115% of the area median.6U.S. Department of Agriculture. Single Family Housing Guaranteed Loan Program Income Limits
At 590, you won’t clear USDA’s automated underwriting. Borrowers below 640 go through a full manual credit review in which the lender evaluates your rental history, utility payments, and other recurring obligations alongside the score.
Conventional and Non-QM: Usually Not the Answer
Fannie Mae removed its longstanding 620 minimum score for loans run through its automated underwriting system in late 2025.7Fannie Mae. Selling Guide Announcement SEL-2025-09 On paper, 590 is no longer an instant rejection. In practice, the system still performs a comprehensive risk check, and most 590 borrowers won’t get an approval without strong compensating factors like a large down payment or very low debt. It’s worth having a lender run your file through to see, but don’t count on it.
Non-QM lenders keep loans on their own books and can look at your full financial picture. A few advertise minimums as low as 580, though most specialized products like bank statement or asset-based loans require 620 to 700. Rates and down payment requirements both run higher than FHA. These are worth exploring if you’re self-employed with hard-to-document income; for most W-2 earners at 590, FHA is the better deal.
What a 590 Score Actually Costs You
FHA Mortgage Insurance
FHA mortgage insurance comes in two parts. The upfront premium is 1.75% of the base loan amount, due at closing, which most borrowers roll into the loan balance. On a $290,000 loan, that adds about $5,075.8U.S. Department of Housing and Urban Development. Appendix 1.0 – Mortgage Insurance Premiums
The annual premium depends on your loan amount, term, and down payment. For a typical 30-year loan under $625,500 with the minimum 3.5% down, the rate is 85 basis points of your balance, paid monthly. On that $290,000 loan, that’s about $205 added to your monthly payment. Put down at least 5% but less than 10%, and the annual rate drops to 80 basis points.8U.S. Department of Housing and Urban Development. Appendix 1.0 – Mortgage Insurance Premiums
Here’s the part that stings. With less than 10% down, and at 3.5% you qualify, the annual premium stays for the entire life of the loan. The only way out is refinancing into a conventional mortgage once your credit and equity improve. Put down 10% or more and the annual premium falls off after 11 years.8U.S. Department of Housing and Urban Development. Appendix 1.0 – Mortgage Insurance Premiums
Your Interest Rate
Headline mortgage rates assume a 740-plus score with 20% down. At 590, expect your rate to land roughly one to two percentage points above the best available rate. The exact spread depends on the lender, your down payment, and market conditions when you lock.
That gap adds up fast. On a $280,000 loan over 30 years, a 1.5% higher rate means roughly $85,000 more in total interest and about $235 more per month. Combined with FHA mortgage insurance, a 590 borrower’s true monthly cost can run $400 to $500 above what a prime borrower pays on the same house. Many 590 buyers treat the FHA loan as a stepping stone, improving credit over the first few years and then refinancing into a conventional loan with no ongoing mortgage insurance. Pushing your score above 700 within a few years can produce dramatic refinance savings.
Strengthening a 590 File
At 590, your file will almost certainly be manually underwritten. That’s not a consolation prize. A human underwriter can weigh strengths an algorithm ignores, and FHA’s guidelines spell out specific compensating factors that offset a low score or stretch your allowable debt ratios.
FHA’s standard debt-to-income limits for manual underwriting are 31% for housing and 43% for total monthly debt against gross income.9U.S. Department of Housing and Urban Development. HUD Handbook 4155.1 – Borrower Qualifying Ratios One qualifying compensating factor stretches those to 37% and 47%. Two factors push the limits to 40% and 50%.10U.S. Department of Housing and Urban Development. Mortgagee Letter 2014-02 – Manual Underwriting
The compensating factors FHA recognizes include:
- Verified cash reserves equal to at least three months of total mortgage payments for a one- or two-unit property, or six months for a three- or four-unit property.
- A new monthly mortgage payment no more than $100 or 5% higher than your current housing payment (whichever is less), paired with a 12-month history of on-time housing payments with no more than one 30-day late.
- Residual income, after all monthly obligations, that meets VA residual income guidelines for your household size and region.
Cash reserves are the easiest factor for most borrowers to control. Three months of mortgage payments sitting in a savings account strengthens your file considerably. For the highest ratio allowance of 40/50, you’ll need two factors; reserves alone won’t get you there.10U.S. Department of Housing and Urban Development. Mortgagee Letter 2014-02 – Manual Underwriting
Rental History Carries Unusual Weight
For manually underwritten FHA loans, the lender must verify 12 months of on-time housing payments through a written landlord verification, 12 months of canceled checks, or bank statements showing rent leaving your account each month.11U.S. Department of Housing and Urban Development. When Might a Verification of Rent or Mortgage Be Required If you rent from a family member, a landlord letter won’t suffice; you’ll need canceled checks or bank statements.
A clean 12-month rental history is one of the strongest signals you can send. If you’ve been paying $1,400 rent on time every month, an underwriter can see that a $1,500 mortgage payment sits well within your ability. Start saving proof now, even if you’re months away from applying.
Letter of Explanation
Expect to write a letter explaining the events that brought your score to 590. Underwriters read these carefully. If medical bills or a job loss sank your credit, say so plainly and attach supporting evidence: hospital billing statements, a termination letter, unemployment records. The goal is to show that your credit problems traced to a specific event rather than ongoing mismanagement, and that the underlying cause has been resolved.
FHA Property Standards Can Narrow Your Options
FHA loans require the home to meet minimum health and safety standards, which makes the appraisal more rigorous than a typical one. Any element at the end of its useful life, or likely to reach it within two years, generally must be replaced before closing.12U.S. Department of Housing and Urban Development. HUD 4150.2 – Property Analysis General Acceptability Criteria
Common issues that trigger required repairs include inadequate drainage around the foundation, chipping or peeling paint on pre-1978 homes, missing handrails, broken windows, and evidence of water damage or structural problems. The property must have a safe water supply and functioning sewage disposal. If the home uses a private well, it must be at least 50 feet from any septic tank and 100 feet from the drain field.12U.S. Department of Housing and Urban Development. HUD 4150.2 – Property Analysis General Acceptability Criteria
These requirements kill deals occasionally, especially on older or as-is properties. If the appraiser flags a deficiency, the seller must fix it before closing or the deal collapses. That bargain fixer-upper may not be FHA-eligible. Factor it into your house hunting.
Should You Raise Your Score Before Applying?
A 590 gets you through the door, but being 30 points shy of 620 is worth thinking about. At 620, your FHA file may qualify for automated underwriting instead of manual review, speeding the process and giving lenders more confidence. It also opens the door to conventional financing after Fannie Mae’s recent policy change.
The fastest score improvements come from reducing credit card balances below 30% of their limits, with below 10% even better, correcting errors on your credit reports, and bringing every account current. Paying down a maxed-out card can lift your score 20 to 40 points within a single billing cycle. If you have collection accounts, some scoring models ignore zero-balance collections, so negotiating a payoff can help.
Once you’re in the mortgage process, your lender can request a rapid rescore, which updates your credit report to reflect recent positive changes within three to five business days instead of waiting for the normal monthly reporting cycle. The lender typically covers the cost. You can’t request one yourself; it has to go through the lender’s credit reporting service. If you’ve just paid down a card or cleared a collection, a rapid rescore could push you over 620 before the underwriter makes a final call.
If you’re not in a rush, three to six months of focused credit work before applying can save tens of thousands over the life of the loan through better rates and the possibility of avoiding FHA mortgage insurance entirely. When you’re this close to a meaningfully better score tier, the math almost always favors patience.