What Home Loan Can You Get With a 680 Credit Score in Texas?

Why 680 Is a Real Inflection Point in Mortgage Pricing

A 680 FICO score puts you solidly in Fannie Mae’s “good” credit tier and gives you access to every major mortgage program — but it’s not a frictionless score. You’re 20 points from the 700 threshold that meaningfully reduces Loan Level Price Adjustments on conventional loans, and 40 points from 720 where LLPAs become nearly negligible. The difference between a 680 and a 720 conventional rate is approximately 0.25% in effective rate — roughly $48/month on a $300,000 loan, or $5,760 over 10 years. That gap is real money, and the question of whether to buy now at 680 or spend 2–3 months improving your score to 710 before applying is worth running through the actual numbers in your specific market.

That said, 680 is a “yes” score across essentially every major program. The work ahead is optimizing — choosing the right program, structuring the down payment efficiently, and selecting a lender whose pricing is competitive at your specific score and LTV combination.

Program Access at 680: Every Option Mapped

Conventional (Fannie Mae and Freddie Mac) — full access: 680 qualifies across the full conventional product suite. LLPA costs at 680 vary significantly by down payment:

• 3% down (97% LTV): LLPA approximately 2.50% on $300,000 = $7,500. Effective rate premium: approximately +0.50%.
• 5% down (95% LTV): LLPA approximately 1.75% = $5,250. Rate premium: approximately +0.35%.
• 10% down (90% LTV): LLPA approximately 0.75% = $2,250. Rate premium: approximately +0.15%.
• 15% down (85% LTV): LLPA approximately 0.50% = $1,500. Rate premium: approximately +0.10%.
• 20% down: LLPA approximately 0.25% = $750. Nearly par.

Down payment significantly affects the LLPA burden at 680. Moving from 5% to 10% down drops the LLPA from $5,250 to $2,250 — a $3,000 reduction in embedded pricing cost. This makes higher down payments meaningfully more attractive at 680 than at 740+ where LLPAs are minimal regardless of LTV. The math at 680 favors pushing the down payment as high as you can afford without depleting your emergency reserves.

Fannie Mae HomeReady (3% down, income limit applies at 80% AMI) and Freddie Mac Home Possible (3% down, income limit 80% AMI) are available at 680. These first-time buyer programs have slightly different LLPA structures with specific pricing improvements for income-qualifying borrowers that partially offset the LTV-based LLPAs.

FHA — full access, often better economics than conventional at 5% down: FHA’s UFMIP (1.75%) and annual MIP (0.55%) are constant regardless of score — no score-based tiering. At 680, the FHA vs. conventional comparison depends primarily on down payment and hold period:

• At 3.5–5% down, 5-year hold: FHA’s LLPA-free rate often produces lower total monthly cost than LLPA-loaded conventional plus PMI. Run the numbers; don’t assume conventional.
• At 10% down, 10-year hold: Conventional usually wins. PMI cancels earlier; FHA MIP with 10% down cancels at 11 years. Which cancels first depends on your specific appreciation assumptions.
• At 20% down: Conventional wins cleanly — no PMI, minimal LLPA at 680, lower rate than FHA.

VA — full access, no score-based pricing: For eligible veterans and active duty, 680 qualifies under every VA lender’s overlay. Critically: VA has no LLPA structure. A veteran with 680 FICO receives identical rate pricing to one with 780 FICO on the same VA loan from the same lender. Combined with no PMI/MIP, no minimum down payment, and VA’s generally competitive base rates, VA is decisively the best available program at 680 for any borrower who has the eligibility.

Texas Vet Loan (VLB) — available for eligible Texas veterans: VLB-participating lenders offer an additional rate subsidy of 0.25–0.50% below market VA rates. At 680, the Texas Vet Loan stacks its rate discount on VA’s existing advantages: no LLPAs, no PMI, the VLB rate subsidy, zero required down payment. Herring Bank participates in the VLB program — Texas veterans can access both the federal VA benefit and the VLB rate reduction simultaneously through a single transaction.

USDA — full access in eligible rural areas: 680 qualifies for USDA GUS automated approval in most cases. Household income must be below 115% of area median income; property must be in a USDA-eligible geographic area. No down payment required. For buyers in USDA-eligible Texas communities who don’t have VA eligibility, USDA at 680 is worth calculating alongside FHA.

Rate Pricing Comparison at 680: What to Actually Expect

Based on current Fannie Mae LLPA grids and 2025 market rate conditions, here’s realistic pricing at 680 on a $300,000 30-year purchase loan in Texas:

Conventional at 10% down ($270,000 loan): Par rate (hypothetical 760 FICO) approximately 6.875%. LLPA at 680/90% LTV: approximately 0.75%, translating to approximately +0.125% in rate (lenders typically spread points into rate). Realistic rate at 680/10% down: approximately 7.0%. PMI at 680/90% LTV: approximately 0.60% = $135/month. Monthly P&I + PMI: approximately $1,932/month.

FHA at 3.5% down ($295,000 loan with UFMIP financed): FHA rate (no LLPAs): approximately 6.875%. P&I: $1,939. Annual MIP (0.55%): $135/month. P&I + MIP: $2,074/month.

VA at 0% down ($306,450 loan with 2.15% fee financed): VA rate (no LLPAs): approximately 6.875%. P&I: $2,013. No PMI/MIP. Monthly P&I only: $2,013.

VA requires the most cash to close (funding fee, though financeable) but produces the lowest payment and preserves $15,000–$30,000 in down payment capital. FHA at 3.5% down requires the least cash upfront but has ongoing MIP. Conventional at 10% down sits in the middle on both dimensions.

The 680-to-700+ Score Improvement Calculation

Moving from 680 to 700 on conventional reduces LLPAs by approximately 0.375–0.50% at 90% LTV — saving $675–$900 in upfront cost or about $35–$50/month in rate equivalent on $300,000. At a $35/month savings, 12 months of improvement time costs $35 × 12 = $420 in payment savings against the opportunity cost of waiting to buy in an appreciating market. In a Texas market appreciating 5% annually on a $350,000 home, every month of waiting costs approximately $1,458 in foregone appreciation. The score improvement savings don’t remotely compensate for waiting — buy at 680 and refinance when your score improves.

Tactics that move scores fastest from 680:

Utilization reduction (fastest, highest impact): Paying revolving balances below 10% utilization (versus 30%) produces maximum score response within one billing cycle. A borrower at 680 with a $4,000 balance on a $5,000-limit card at 80% utilization who pays to $400 (8%) can reasonably expect 20–35 additional points within one reporting cycle. That could push 680 to 710+, crossing the conventional LLPA reduction threshold.

Error correction with rapid rescore: Pull all three bureau reports. Any inaccurate negative item — wrong late payment date, account not yours, settled collection still showing open — is disputable. Correcting through rapid rescore (your lender’s bureau vendor) takes 3–7 days versus 30 days through standard dispute channels. A single corrected inaccurate 30-day late can produce 20–40 points of improvement.

Conventional vs. FHA at 680: The 10-Year Modeled Comparison

$300,000 Texas purchase, 680 FICO, 5% down. Both loans at approximately 7.0% rate. Texas property taxes 1.9%, insurance $2,800/year:

FHA (3.5% down with UFMIP financed): Down $10,500. Loan $294,400 (including UFMIP). P&I at 6.875%: $1,934. MIP $134/month. Monthly PITI (P&I + MIP + taxes + insurance): $2,643. MIP runs 30 years with 3.5% down.

Conventional 5% down: Down $15,000. Loan $285,000. P&I at 7.125% (6.875% + LLPA at 680/95%): $1,919. PMI at 0.75%: $178/month. Monthly PITI: $2,572. PMI cancels at approximately year 10 with 4% annual appreciation.

Years 1–9: Conventional saves approximately $71/month = $7,668 over 9 years. But conventional required $4,500 more in down payment. Year 10: PMI cancels on conventional; FHA MIP continues. Years 10–30: Conventional saves $134/month = $32,160 over 20 years. Total 30-year advantage of conventional: approximately $7,668 + $32,160 – $4,500 additional down payment cost = $35,328 in favor of conventional if held 30 years.

Average hold period for Texas homeowners: 8–12 years (NAR data). At 10-year hold: conventional saves $7,668 in years 1–9 plus a few months of post-cancellation savings. The advantage is positive but much smaller than the 30-year picture suggests. At 7-year hold (buyer sells before PMI cancels): FHA’s lower effective rate (no LLPAs) may outperform conventional’s LLPA-loaded rate plus PMI over that period. The correct answer depends on your specific hold period assumption — ask your lender for a side-by-side with your actual numbers before choosing.