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The 620 rule — and its three exceptions
- Standard lane (620+): first-time buyers from 3% down, 5% standard, conforming limits, cash-out refinancing to 80% LTV on a primary home and 75% on investment property.
- Exception one — owner-occupied purchase: below 620, a purchase of the home you’ll live in can proceed with 20% or more down; the equity you bring compensates for the score.
- Exception two — investment purchase: below 620, 30% or more down can carry an investment purchase.
- Exception three — refinance: below 620, the existing balance must be under 65% of appraised value. Above that line it’s an honest decline — and usually a pivot to FHA (which accepts below-620 refinances at any LTV) or, on a primary home in an eligible state, a Home Equity Agreement.
The PMI advantage nobody explains
Conventional mortgage insurance is removable at 20% equity — and there’s none at all at 80% LTV or below. FHA’s insurance at maximum LTV lasts the life of the loan. That single difference is why a borrower who qualifies for both usually does better conventional, and why borrowers who start FHA often refinance into conventional once equity and credit allow. We run both side by side and show you the crossover.
The program in plain numbers
| Term | Conventional |
|---|---|
| Standard minimum credit | 620 |
| Below-620 purchase (owner-occupied) | Proceeds with 20%+ down |
| Below-620 purchase (investment) | Proceeds with 30%+ down |
| Below-620 refinance | Proceeds with balance under 65% of appraised value |
| Down payment at 620+ | From 3% (first-time buyers); 5% standard |
| Mortgage insurance | Removable at 20% equity; none at 80% LTV or below |
| Cash-out refinance | 80% LTV primary · 75% investment |
| Where offered | 30 states — see the list |
