The 620 Credit Score Wall Is Falling: What Lower Minimums Mean for AZM Lending Borrowers

By Josh Yoder

If you have been told “come back when your credit score is 620,” that answer just changed. Over the past four weeks, several major wholesale lenders have dropped or eliminated their minimum credit score requirements on conventional, FHA, and VA loans, and one went as low as 500. At AZM Lending, we watch these guideline changes closely because they decide whether a real borrower gets a yes or a no. This one is a yes for a lot of people who were turned away in 2025.

This is not one lender’s promotion. It is a competitive wave moving through the wholesale market, and it matters for anyone shopping for a mortgage with a score in the 500s. Here is what changed, who changed it, and what it means for your loan.

Four Lenders Just Loosened Their Credit Score Minimums

United Wholesale Mortgage removed its overlays entirely

UWM, the largest wholesale lender in the country, announced on October 7 that it is removing its minimum credit score overlays on agency loans. That covers conventional loans sold to Fannie Mae and Freddie Mac, plus FHA, VA, and USDA loans. Eligibility is now decided by the automated underwriting system under agency guidelines, not by UWM’s own score floor. Its president and CEO, Mat Ishbia, put it plainly: “A credit score is definitely part of the story, but it doesn’t tell the whole story.”

Two weeks later, UWM added a pricing layer: through December 31, there are no credit score loan-level pricing adjustments on FHA and VA loans for borrowers with scores of 580 or higher. It also cut the pricing adjustment on VA cash-out refinances above 90% loan-to-value from 1.250 to 0.750. Removing an overlay gets a file through the door; waiving the pricing penalty makes the payment better once it is inside.

Windsor Mortgage set a flat 580 floor

On November 2, Windsor Mortgage, a wholesale lender, announced to broker partners that its minimum FICO score is now 580 across conventional, FHA, and VA loans. The catch, and it is an important one: the loan must receive an Approve/Eligible finding from the automated underwriting system. Windsor is not waiving agency rules. It is removing its own stricter layer on top of them.

eLEND went to 500 on FHA cash-out refinances

On November 2, eLEND launched a program called CreditEdge that accepts FHA cash-out refinances with decision credit scores of 500 to 579, and select conventional purchase and rate-and-term refinance loans with scores below 620, when the file gets an automated underwriting approval. Two limits matter: conventional loans that require private mortgage insurance still need a 600 minimum, and everything must be locked by December 31, 2026. It is a year-end program, not a permanent guideline.

Loan United advertised a full 500-FICO menu

On November 3, wholesale lender Loan United circulated a rate sheet titled “The 500 FICO Solution” covering conventional, FHA, and VA loans. The fine print shows how the risk is contained: conventional loans down to a 500 score are capped at 80% loan-to-value below a 620 score and must receive an Approve/Eligible finding, with no manual underwrites. FHA purchases allow a 580 score up to 96.5% LTV or a 500 score up to 90% LTV. VA purchases and cash-out refinances go to a 500 score at 100% LTV, with debt-to-income capped at 65% on automated approvals.

The Side-by-Side View

Why Lenders Can Go This Low

Here is the part most borrowers never hear: the agencies themselves already allowed much of this. FHA’s own tiers accept scores as low as 500, as long as the borrower puts 10% down; a score of 580 or higher qualifies for FHA’s 3.5% minimum down payment. Conventional loans have typically required 620 in practice, and Fannie Mae eliminated its longstanding 620 minimum for loans evaluated through Desktop Underwriter in November 2025, letting its automated system judge the full file instead of a single number.

So why did so many borrowers get told no? Because of lender overlays. A lender adds its own stricter minimum on top of the agency rules, usually to keep risk down or keep underwriting fast. The FHA allows a 500 score; most lenders would not touch anything below 580 or 600, and conventional lenders rarely went below 620. What changed in the last month is that several large wholesalers decided those overlays were costing them too much business, and dropped them. The agency guardrails, the automated underwriting approval, still do the actual risk assessment.

What This Means at AZM Lending

This is where working with a broker changes your outcome. AZM Lending is not one lender with one rulebook. We place loans across multiple wholesale lenders, which means when one lender’s overlay says no, we route the same file to another whose guidelines say yes.

A practical example. Say you are a veteran with a 575 credit score buying a primary home with full VA entitlement, zero down. A retail bank with a 620 overlay declines you in ten minutes. At AZM Lending, we run the same file through automated underwriting and place it with a wholesale lender that accepts VA loans to a 500 score at 100% LTV. Same borrower, same house, same week: different answer, because the lender underneath the loan is different.

Or say you have a 590 score and 10% saved for an FHA purchase. You qualify for FHA’s standard 3.5% down tier with room to spare, and with the current credit-score pricing waivers, you are not paying a penalty for being near the line.

The mechanics we run for every file: we document income and assets, run the loan through Desktop Underwriter or Loan Product Advisor, and match the AUS finding against the wholesale lenders whose overlays fit the scenario. An Approve/Eligible finding is the key that unlocks these programs. If the automated system approves the loan, our job is finding the lender that will fund it.

For homeowners sitting on equity, the same wave applies. FHA cash-out refinances down to a 500 decision score are live right now through at least one major program, and with roughly $11.7 trillion in tappable equity across American mortgages, this is the most flexible the cash-out market has been in years.

What Your Payment Looks Like Right Now

Timing helps too. Mortgage rates have been sliding, and on November 4 the 30-year fixed was quoted around 7.22%, its lowest level in about six weeks.

On a $350,000 loan at 7.27% over 30 years, the principal-and-interest payment is about $2,392 per month. If rates had stayed at their early-October level near 7.50%, that same loan would cost about $2,447 per month, roughly $55 more. That difference is before any benefit from the pricing adjustments being waived on FHA and VA loans, which can improve your rate-and-cost options further. Every scenario prices differently, so treat these as illustrations, not quotes.

Read the Fine Print Before You Celebrate

• An automated approval is still required. None of these programs are “any 500 score gets a loan.” The AUS looks at your full profile: income, debts, reserves, and housing history. A low score with clean everything-else can get an Approve/Eligible; a low score with recent late payments often will not.
• Lower scores come with limits. Below 620 on conventional, expect LTV caps near 80%, primary-residence requirements, and in eLEND’s case a 600 minimum whenever private mortgage insurance is involved.
• Some of this expires. The pricing waiver and CreditEdge program both require locks by December 31, 2026. Windsor’s 580 floor has no stated expiration, but wholesale guidelines change without much notice.
• Your score still affects your rate. Removing an overlay decides whether you qualify. Pricing decides what you pay. Both matter, and both are worth shopping.

The Bottom Line

A 620 credit score has been the unofficial border wall of mortgage lending for years. Several wholesale lenders just opened gates in it, and more are likely to follow as they compete for the borrowers everyone else is turning away. If you were declined this year because of a score in the 500s, or you have been putting off buying because you assumed 620 was the law, it is worth a fresh look. The rules changed. AZM Lending can tell you, with a real automated underwriting run, exactly where you stand today.

Talk to an AZM loan officer and we will run your scenario against every wholesale lender on our shelf, not just one.

Sources

• National Mortgage Professional: UWM Removes Credit Score Overlays, Automates Score Selection (Oct 7, 2026)
• National Mortgage Professional: UWM Waives FHA And VA Credit-Score Pricing Hits Through Year-End (Oct 21, 2026)
• National Mortgage Professional: eLEND Lowers Credit Score Floors To 500 On FHA Cash-Out Loans (Nov 2, 2026)
• The Mortgage Reports: FHA Loan Credit Score Requirements
• Windsor Mortgage broker announcement email to AZM Lending, Nov 2, 2026
• Loan United rate sheet email to AZM Lending, Nov 3, 2026
• Mortgage News Daily: Mortgage Rates Hold Steady at Recent Lows (Nov 2, 2026)