Knowing the minimum mortgage requirements can help you choose the best loan program for you if you’re planning to buy a home. Higher loan limits in 2022 will give more borrowing power to homebuyers who are qualifying for a mortgage. Some changes are ahead, however, as lenders adjust to the changing market conditions stemming from rising interest rates and home prices.
2022 minimum mortgage requirements by loan type
Mortgage rates and home prices are expected to rise in 2022, but mortgage requirements will remain largely the same. One big change for 2022 homebuyers: Conforming loan limits will rise by the biggest year-over-year dollar amount on record since 1970.
Below is a snapshot of the new loan limits, along with the basic mortgage requirements:
Minimum mortgage requirements by loan type
| Conventional | FHA | VA | USDA | |
|---|---|---|---|---|
| Down payment | 3% | 3.5% with 580 score 10% with 500-579 score | 0% | 0% |
| Credit score | 620 | 580 with 3.5% down 500-579 with 10% down | No minimum, but 620 is lender standard | No minimum, but 640 is lender standard |
| Mortgage insurance or similar fees | PMI 0.15% to 1.95% | UFMIP 1.75% Annual MIP 0.45% to 1.05% | 0.5% to 3.6% VA funding fee | Upfront guarantee fee 1% Annual guarantee fee 0.35% |
| DTI ratio | 45% back-end ratio* | 31% front-end DTI ratio* 43% back-end DTI ratio * | 41% back-end ratio* | 29% front-end ratio* 41% back-end ratio* |
| Loan limits for single-family home | $647,200 in low-cost areas | $420,680 in low-cost areas | N/A | N/A |
*Some exceptions may be made for borrowers with higher DTI ratios who also have ample cash reserves, residual income or other mitigating circumstances
Conventional mortgage requirements
Conventional loans, the most popular mortgage option, aren’t guaranteed by any government agency. The government-sponsored enterprises Fannie Mae and Freddie Mac set more stringent conventional home loan requirements than government-backed mortgages.
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