Getting approved for a mortgage with a 560 credit score is difficult — but not impossible.
In 2026, most conventional mortgage lenders prefer:
- 620+ credit scores,
- lower debt ratios,
- and cleaner credit histories.
However, several FHA-focused lenders and non-QM mortgage companies still work with borrowers in the 500–579 range, especially when applicants have:
- stable income,
- larger down payments,
- low debt-to-income ratios,
- or strong compensating factors.
For most borrowers with a 560 score, an FHA loan is usually the most realistic path to homeownership. FHA guidelines technically allow scores as low as 500 with a 10% down payment.
Best Mortgage Lenders for 560 Credit Scores
Best Overall for FHA Flexibility
Carrington Mortgage Services
Carrington is widely known in the mortgage industry for working with lower-credit borrowers and manually underwriting files that automated systems may reject.
Best for:
- FHA loans below 580
- recent credit issues
- manual underwriting
- first-time buyers rebuilding credit
According to recent bad-credit lender rankings, Carrington may accept FHA borrowers starting around 550 depending on overall file strength.
Why Carrington Stands Out
- Strong FHA specialization
- More flexible underwriting than many large banks
- Experience with recent collections or late payments
- Better fit for borderline approvals
Potential Drawbacks
- Higher interest rates
- Larger lender fees possible
- Fewer ultra-low-rate options
Best for Manual Underwriting
New American Funding
New American Funding is one of the better-known FHA lenders for borrowers with limited or damaged credit histories.
Bankrate reports the lender may allow FHA scores down to 500 on some programs.
Best For
- borrowers with non-traditional income,
- self-employed buyers,
- manual underwriting scenarios,
- lower credit FHA applications.
Industry reviews consistently mention their willingness to review files manually instead of relying entirely on automated underwriting systems.
Best Marketplace for Comparing Multiple Lenders
LendingTree
For 560-credit borrowers, rate shopping matters enormously because lender overlays vary dramatically.
Some lenders may deny a 560 score immediately while others may approve with:
- 10% down,
- reserves,
- or compensating factors.
LendingTree helps compare multiple lenders simultaneously instead of applying one-by-one.
Reddit and broker discussions frequently recommend mortgage broker marketplaces for sub-600 borrowers because approval standards differ substantially across lenders.
Best for FHA Loans Starting at 500
Lower Mortgage
According to recent Bankrate lender data, Lower offers FHA programs with minimum scores as low as 500 in certain situations.
Strong Fit For
- FHA purchase loans
- lower-credit borrowers
- buyers needing more flexible qualification
However, borrowers with 560 scores should still expect:
- stricter underwriting,
- larger down payments,
- and potentially higher mortgage insurance costs.
Best for FHA Government-Backed Loans
Guild Mortgage
Guild Mortgage is known for:
- government-backed loans,
- first-time buyer programs,
- and flexible FHA lending.
Forbes recently included Guild among top FHA lenders in 2026.
Guild may work well for borrowers who:
- have steady income,
- need down payment assistance,
- or require extra guidance during underwriting.
Mortgage Options With a 560 Credit Score
| Loan Type | Approval Chances at 560 | Typical Down Payment |
|---|---|---|
| FHA Loan | Moderate | 10% |
| Conventional Loan | Very low | Usually unavailable |
| VA Loan | Possible with some lenders | 0% |
| USDA Loan | Difficult | 0% |
| Non-QM Loan | Possible | Often 10%–20% |
Most borrowers with a 560 score will have the highest approval odds through FHA financing.
FHA Requirements for a 560 Credit Score
Typical Requirements
| Requirement | Typical Standard |
|---|---|
| Minimum score | 560 |
| Down payment | 10% |
| Stable employment | 2 years preferred |
| DTI ratio | Usually below 43% |
| Primary residence | Required |
| Cash reserves | Helpful |
Example FHA Down Payment
For a $275,000 home purchase:
275000×0.10=27500
Estimated minimum down payment:
- $27,500
Real-World Mortgage Insight for 560 Scores
Many borrowers misunderstand the difference between:
- FHA minimum guidelines,
- and lender overlays.
FHA itself may allow lower scores, but individual lenders often impose stricter rules.
Reddit mortgage discussions in 2026 repeatedly show borrowers discovering that:
- one lender rejects a 560 score,
- while another approves the same borrower with additional reserves or manual underwriting.
That is why shopping multiple FHA lenders is critical.
How to Improve Approval Odds With a 560 Score
1. Increase Your Down Payment
Lenders view larger down payments as lower risk.
2. Reduce Credit Card Utilization
Paying balances below 30% utilization can improve scores quickly.
3. Avoid New Credit Applications
Do not finance vehicles or open new cards before applying.
4. Build Cash Reserves
Extra savings strengthen your file substantially.
5. Work With FHA Specialists
Not all lenders handle low-credit FHA loans equally well.
Pros and Cons of Applying at 560
Pros
- FHA approval still possible
- Homeownership may be achievable sooner
- Manual underwriting options exist
- Some lenders accept scores below 580
Cons
- Higher mortgage rates
- Larger down payment requirements
- Limited lender options
- More underwriting scrutiny
- Higher monthly mortgage insurance costs
Frequently Asked Questions
Can I buy a house with a 560 credit score?
Yes, usually through an FHA loan with 10% down.
What is the easiest mortgage to get with a 560 score?
FHA loans are generally the easiest mortgage option for borrowers in the 500–579 range.
Do any lenders approve below 580?
Yes. Some lenders and FHA specialists may approve scores as low as 500 depending on compensating factors.
Will I pay higher mortgage rates with a 560 score?
Almost certainly. Lower credit scores usually result in higher rates and mortgage insurance costs.
Should I wait and improve my score first?
In many cases, yes. Even improving from 560 to 580 can significantly reduce your down payment requirement and improve loan pricing.