According to Seattle-based real estate company Redfin, teachers nationwide can afford about 48% of rentals near their schools. That’s up from 41% last year.

“I’m optimistic this could be a trend instead of just a blip because Seattle has been moving in the right direction when it comes to adding housing supply to the market,” Daryl Fairweather, Redfin’s chief economist, said.

The bad news is this is still significantly below pre-coronavirus pandemic levels, which were closer to 58%.

Redfin looked at 33 cities and found that new leases are sluggish because there are many units on the market.

Teacher salaries are also up almost 4% from last year. The numbers are even better in Seattle.

“In Seattle in particular, there was an 8% rise in median teacher salaries, so that also adds to teacher buying power when it comes to a rental,” Fairweather said.

In Portland, Oregon, teachers can afford 91% of rentals within commuting distance from their school.

In Miami, it’s less than 1%.

The news isn’t so great for teachers who want to buy homes.

Nationwide, teachers can only afford about 14% of homes near their schools. That number hasn’t changed since last year, but it’s down from 39% in 2019.

More teachers may be able to break into the housing market if interest rates start to drop.

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Some days plumbers and electricians arrived. Construction crews carried in stainless steel sinks. Ovens and ranges showed up. No one noticed the concrete finishers. Then came the moving vans and the pickup trucks.

But word quietly spread that something amazing was working away at Hooper House, a reconditioned 1886 residence that once housed one of Baltimore’s cotton and canvas sailcloth barons.

For years, Hooper House sat at the corner of Saint Paul and 23rd Streets like that big, obsolete antique sideboard or china closet that no one really wanted. Yes, this boldly Victorian house had a substantial presence, with 77 mostly huge windows and 33 rooms, a dumbwaiter and a set of servants’ stairs hidden behind old plasterboard.

While there are grand staircases worthy of a private club, what do you do with this remarkable but problematic residential relic of Baltimore’s 19th century manufacturing elite? It’s so big, and how do you make economic sense of oversized fireplaces and chimneys that could accommodate two Santas?

Then, two years ago, a fire broke out on its upper floors, and though the damage was contained, the water used to fight the blaze created its own set of preservation issues — plaster damage and warped floors.

A developer and creative partner rolled up their sleeves, determined to make the place into a working space with a restaurant and bar. The result of this summer’s transformation is an unexpected knockout.

On a recent morning, dozens of diverse young persons brought their laptops to Mama Koko’s, what might just be Baltimore’s most elegant new eating and cocktail establishment.

The grand old Hooper family parlor has been transformed into a breakfast bar — and later in the day, a full cocktail setting. Customers were having ham and eggs at 9 a.m., but by evening, the scene changes. It’s no longer latte and tea, but rum, citrus and herbs.

“Small businesses wanted to operate in a setting that is singular in the city,” said Matt Oppenheim, a developer who commutes to Baltimore from Washington, D.C. “We are able to offer something unique and special in Old Goucher. We provide a space where clients and customers are going to be inspired.”

Oppenheim’s business partner is Michael Haskins Jr., the proprietor of the fashion clothing brand Currency Studio, who lives nearby in a renovated East 20th Street home in the Barclay community.

“There’s an experience of coming here, walking in the front door, up the steps and seeing this interior,” said Haskins as he gestured toward the high ceilings and unhurried, stylish decor. It’s all reminiscent of a first class ocean liner lounge, or at least the drawing room of some merchant prince and princess.

“We collaborated heavily with Ayo Hogans, an owner of Mama Koko’s, who is a professional fashion stylist,” said Oppenheim.

There’s a new outdoor patio with teakwood tables. And on a cool September morning, what better place to catch up on your emails?

So the question has to be asked, what is Hooper House?

Just inside the front door is a proper office directory, listing its business tenants who occupy the former bedrooms and library on the upper floors. They range from a hair salon, to fashion designers and a candle maker.

Haskins says that despite the business uses, the old house still retains its residential atmosphere within the collection of old Goucher College buildings and 1880s rowhouses in midtown Baltimore.

“It never really feels like it’s booming here. It’s just Baltimore,” Haskins said. “As you move through the city, you can miss what is going on inside this preserved place and the architecture we have preserved. It was important to welcome these businesses — to put the creative class in one place.”

The restaurant group confirmed plans to put a restaurant in the space; however, a name and concept are not “ready to be released,” according to a Thursday news release. While details are sparse, the group is “dedicated to honoring the historical significance of the location while bringing an exciting option to the residents and visitors of Annapolis,” according to the release.

“We greatly respect the rich history of Annapolis and the Stevens Hardware building, and while we are excited to bring an Atlas concept to this iconic location, we have no plans to alter the building’s historic facade,” Joe Sweeney, spokesperson for Atlas, wrote in an email Friday.

Stevens Hardware, at 142 Dock St., closed its doors in December 2012 after decades of operation. The space was occupied by Mission BBQ from 2016 until it closed in January. 

Dock Street will be the restaurant group’s fourth location in the downtown area. In addition to the Choptank on Compromise Street, the Baltimore-based group plans on opening two  establishments in the Annapolis Waterfront Hotel space that will be left vacant by Pusser’s Caribbean Grille after it closes later this year. A tequila bar called Armada and an Italian chophouse, Marmo, are expected to open next summer.

Atlas Restaurant Group was founded in 2012 by President and CEO Alex Smith. Smith and his brother Eric Smith, a co-owner of Atlas Restaurant Group, are nephews of Baltimore Sun owner David D. Smith.

“We are thrilled to expand our presence in Annapolis and to be a part of the vibrant community here,” Alex Smith said in the Thursday statement. “The historic nature of 142 Dock Street provides a unique opportunity to blend the past and the future, and we look forward to sharing more details about our plans in the coming months.”

“His body gave out and he died of natural causes,” said his daughter Shelly Himmelrich.

Born in Rejowiec, Poland, he was the son of Max Pechter and Sara Bittner. Beginning in 1939, as a 5-year-old, he and his family fled the Nazi occupation of Poland. They moved east and reached the Russian border on horse and buggy, then rode cattle cars with other refugees. They lived in Siberian and Uzbekistan displaced persons camps before reaching Baltimore in 1949.

His father burned all his personal documents to hide their Orthodox Jewish background.

Mr. Pechter’s mother told the family: “Tomorrow will be better. Tomorrow will be better.” She also advised her son to take care of other people throughout his life and planted the seeds of his philanthropic endeavors.

He attended Talmudical Academy and Forest Park High School, where he met his future wife, Marilyn Bernstein. He studied at the University of Maryland, College Park and served two years in the Army.

“My father dove into real estate, first as a laborer, then a broker and quickly scraping a few dollars from friends and family to become an investor and developer,” his daughter said.

He built homes along Route 40 West, along York Road and in Parkville and White Marsh. He also owned the Timonium and Perry Hall shopping centers and the old Enchanted Forest property in Howard County.

In a 1999 Sun story, Mr. Pechter said he believed the power of hate can be diminished only through education. At that time he was the largest private donor to the then-new Yad Vashem International School for Holocaust Studies in Jerusalem.

She said her father was inspired by his parents and his journey to help the less fortunate.

“He truly had a rare kindness in him that was inherited straight from his mother. He did all of the things, and worked a lot professionally and in service to others,” said his daughter Shelly.

Named Tau Epsilon Phi’s 1989 Man of the Year, he was a founder of the Baltimore Symphony Orchestra’s Endowment Fund. He was honored by the Midtown Churches of Baltimore, a group based in the Old Goucher neighborhood, for his work for the homeless.

Mr. Pechter was also honored by the Jewish National Fund in 1995 for a lifetime of work.

He was active in the Associated Jewish Charities and Welfare Fund and the State of Israel Bonds. He also supported the U.S. Holocaust Memorial Museum.

He was a Sinai Hospital board member, and a cafe there is named in his parents’ honor.

Survivors include his wife of 68 years, Marilyn Bernstein Pechter; two sons, Martin Pechter, of Boca Raton, and Jeffrey Pechter, of Delray Beach, Florida; two daughters, Shelly Himmelrich, of Delray Beach, and Melissa Pechter, of Housatonic, Massachusetts; a sister, Dora Schwartz, of Florida; six grandchildren; and three great-grandchildren.

Services were held Aug. 26 at B’nai Torah Congregation in Boca Raton.

Home prices may have come down from their 2022 high, but they remained out of reach for the typical would-be first-time buyer in the second quarter, especially in the nation’s most populous areas.

Buying a home in this market can be particularly hard for people who haven’t done it before. First-time buyers traditionally have lower incomes and less established credit than repeat home buyers. Further, they generally make smaller down payments — 8%, on average, according to the most recent Profile of Buyers & Sellers from the National Association of Realtors, compared with 19% for repeat buyers. Buying a first home has arguably never been easy, but it’s gotten extremely difficult under current conditions.

With a down payment of 8%, housing payments on a typically priced home in the second quarter of 2024 would equate to almost half of the median gross monthly income for Americans of first-time buyer age.

Making a larger down payment or choosing a less desirable home could make this initial purchase easier, but not all homebuying hopefuls will find those options possible.

Housing payments for first-time buyers: 49% of income

The average sticker price for a home in the second quarter of this year was $439,000, according to NerdWallet analysis of Realtor.com data. But the advertised price of a home is far from the only consideration of affordability.

For that reason, we examined the potential housing payment for first-time buyers in the second quarter. This payment not only accounts for the price of the home, but also the typical first-time buyer down payment, mortgage rate, real estate taxes, homeowners insurance and PMI, or private mortgage insurance — a requirement on conventional mortgages financed with less than 20% down.

That estimated monthly housing payment using the nationwide average home price was close to $3,500 in the second quarter of the year. That’s 49% of the median income for Americans in the first-time home buyer age group. And estimated payments in some of the country’s largest metro areas were considerably higher.

First-time home buyer tip: In the highest-priced markets such as Los Angeles, New York and San Diego, putting 8% down on a home may not be feasible. That’s because typical home prices in these areas are well over one million dollars, and would require what’s known as a jumbo mortgage. Currently, loans over $766,550 exceed the cap for conforming loans, according to the Federal Housing Finance Agency, and jumbo loans generally have stricter standards, including larger down payment requirements. Buyers in these markets will need higher-than-average incomes, larger down payments and flexibility on their side to become homeowners.

In other areas, buyers hoping to put less than 20% of the sale price down have more options. Many lenders offer loans with lower down payments — as low as 3% — and most states have first-time home buyer programs with benefits such as down payment assistance.

Buyers (and borrowers) have a few options

One lesson that became apparent to home buyers over the past few years: You can’t take low mortgage rates for granted. After several years of rates below 5% (with periods even below 3%), current rates are a reminder that it’s not only home prices that matter in home affordability calculations. Borrowers can take some steps to ensure they qualify for the lowest rates available, but lenders will only go so low. Home down payments are another input that can have a considerable impact on how much buyers spend each month.

Increasing a down payment from 8% to 12%, for example, can shave several hundred dollars off of the monthly housing cost. But if possible, increasing your down payment to 20% can eliminate the PMI requirement on a conventional loan.

First-time home buyer tip: To be sure, putting 20% down on a high-priced home won’t be possible for all first-time buyers. It’s an especially tall order when homes are priced as high as they are now. But the larger your down payment, the less you have to finance, and every bit helps. So, for instance, if you’re waiting for mortgage rates to come down a bit, using that time to intentionally squirrel away more in savings means you can also take out a smaller loan when you’re ready to start shopping. If you hope to buy in the coming months, keeping your down payment fund in a high-yield savings account ensures it’s readily available. But if you plan on waiting a year or two and can stand putting the money out of reach, a certificate of deposit may offer higher rates.

Inventory deficit remains the driver of high prices

The high home prices we currently see are a direct result of too few homes. This low supply in the face of high demand drives prices up. And currently, the supply is so low that even seasonal quarterly gains in inventory aren’t enough to provide relief.

The second quarter of the year generally brings more listings to the market, and Q2 of 2024 was no different. Across the country, the number of homes on the market rose by 17% compared with the previous quarter, and a generous 34% compared to last year’s second quarter. Despite these gains, list prices rose 4% in the second quarter.

While inventory continues to climb, the current number of homes on the market at any given time is still at a significant deficit from where it was before the pandemic.

First-time home buyer tip: In the past, first-time buyers began their homeownership journey with a “starter” home — something smaller or a home that needed some work — to help keep the price point reasonable. But in this market where homes are few and far between, starter homes are difficult to find. One way to increase the number of homes available to you is to expand your search. Whether geographically — looking at homes in different neighborhoods or even towns — or by considering home types or features that aren’t on your long-term wishlist, the more flexible you are in your homebuying journey, the more likely you are to find something that fits the bill.

The analysis methodology is available in the original article, published at NerdWallet.

Elizabeth Renter writes for NerdWallet. Email: elizabeth@nerdwallet.com. Twitter: @elizabethrenter.

The article Q2 Affordability Obstacles Hinder Would-Be First-Time Home Buyers originally appeared on NerdWallet.

Adams, who died in 2011, is the stuff of urban legend. He was the city’s top Black businessman, venture capitalist and orchestrator of the pre-legal lottery. He made millions on the pennies, nickels and dimes of small time wagerers. He kept his mouth shut, shunned publicity and was personally frugal.

The odds for him making it were far from promising. He was the son of a white businessman and his African-American maid. His mother wanted little to do with him.

“Not until adulthood did he learn the surprising truth about both parents, a truth he shared with few others,” writes author Mark R. Cheshire in his 2021 book, “They Call Me Little Willie.”

Adams was raised by his grandparents on their tenant North Carolina tobacco and cotton farm. A savvy grandmother advised Willie to learn arithmetic so their landlords could not bamboozle him out of a share of the farm profits.

Willie embraced school and the blackboard. He was something of a math wiz and could tabulate figures with ease.

Biographer Cheshire describes Adams as having a “monomaniacal focus” and developing “a very favorable taste for the buying power of money” and a “precocious ability to identify money-making opportunities.”

Adams relocated to Baltimore in 1929 to escape the perilous agrarian conditions in North Carolina. He lodged with an uncle in the 1800 block of East Eager Street north of Johns Hopkins Hospital.

He repaired and rebuilt bicycles for the Polish and Czech immigrants living nearby. He also witnessed how Baltimore residents wagered a penny a day, maybe a nickel or dime, on the numbers game, where neighborhood bookies operated a lottery without the legal blessing of the State of Maryland.

His family’s landlady had him read the daily newspaper to her and find a number buried in the tiny type (a stock market close or total among wagers at a race track) of a newspaper, Cheshire writes.

Soon Adams stopped fixing old bikes and sought out his own customers who wanted played their favorite numbers.

It is hard to imagine today how pervasive the numbers game was in Baltimore. By 1951, when Adams was called before a U.S. House Committee, he said that $1,000 a day was normal. (Adams would have plenty of legal scrapes, but amazingly beat them, often by hiring well connected lawyers with substantial legal and political pedigrees.)

By 1931 he picked up the nickname, “Little Willie,” after a night at a movie theater with friends. The film was “Little Caesar” and its star was Edward G. Robinson.

In time East Baltimore could not hold Little Willie and he jumped to the larger and wealthier West Side. He opened and built his own night club and bought rental properties.

When cash ran short, Adams made friends in the Jewish business community — Irvin Kovens and Maurice L. Lipman. Adams never revealed which of these men was his main go-to guy.

He was also fast on his feet. “Back then, whites almost never came into the Black community. So the police didn’t know where to look for me,” Adams said decades after the 1930s.

Cheshire notes that Adams only wanted to be a business operator and make money. He abhorred violence.

He took his profits from one investment and put them into another — from the bar, to the purchase of a Black Chesapeake Bay resort, Carr’s Beach.

Over the years he had a number of business partners, among them sausage maker and City Councilman Henry G. Parks and developer Theo Rogers. He also assisted other Black business owners financially.

In 2021 the William L. and Victorine Q. Adams Gilchrist Center opened near the 36th Street boundary of the old Memorial Stadium property. The hospice, designed for those without caregivers, was financially assisted by the Adams Foundation and Theo Rogers, his partner.

List price: $4,550,000

Year built: 2006

Real estate agent: Pamela Tierney of Coldwell Banker Realty in the Mid-Atlantic

Last sold price/date: For $2,825,000 on July 16, 2018

Property size: 9,038-square-foot home has six bedrooms plus seven full bathrooms and an attached three-car garage on 4.37 acres.

Unique features: This waterfront home overlooking the Severn River has a private pier with three boat lifts, a small sand beach and a heated salt-water swimming pool.

Even when the new owners aren’t enjoying spectacular sunsets over the water from their Adirondack chairs or while sitting around the fire pit, they have their choice of other captivating views: of the small stream and artificial waterfall, or of spring blooms and changing autumn colors from the trails winding through more than 4 acres of forest.

An irrigation system provides easy watering for the landscaped beds, and the exterior stone retaining walls create multiple covered and open dining areas on the patio.

This house was made for entertaining. It has at least three kitchens: the primary kitchen with warm wood cabinets, a statement lighting fixture and a wet/dry bar on the same level; a second kitchen on the veranda with a Wolf range, refrigerator and pool bath; and an outdoor kitchen that includes a built-in grill and dishwasher. There’s even a snack bar just behind the home movie theater.

This home has five gas fireplaces (including one in the primary bedroom), coffered ceilings, and river views.

On warm evenings, stream a film on the outdoor TV sets, with discreet external lighting to add ambience.

Other amenities include a game room, home gym, and an elevator that opens into the three-car garage — ideal for transporting groceries and luggage.

Not only is the garage is heated, but it has a marble floor and includes a charger for an electric vehicle.

“David was a civic leader who got the job done and he didn’t need any acclaim,” said Wally D. Pinkard Jr., former CEO of Colliers Pinkard. “He did great work and he did it with real class.”
He added: “He looked at problems, simplified them, and could see the needs of others. He was the definition of integrity.”

David Michael Gillece, son of James Patrick Gillece, a state government worker, and Erna Barling Gillece, a homemaker, was born in Baltimore and raised in Linthicum.

A 1967 graduate of Calvert Hall College High School, he earned a bachelor’s degree from LaSalle University in Philadelphia, and a master’s degree in the same discipline from the University of Notre Dame in Notre Dame, Indiana.

After leaving Notre Dame, he began his career in 1973 as a staff member at the Citizens Planning and Housing Association where he “led a groundbreaking study on redlining, exposing racial discrimination in lending policies by major financial institutions,” according to a biographical profile.

He was president of the City Fair and deputy director of the Citizens’ Planning and Greater Baltimore Committee from 1976 to 1988, when he was named president of the Baltimore Economic Development Corp.

From 1990 and most of 1991, he was president of Center City-Inner Harbor Development Corp.

After Mr. Gillece oversaw at Mayor Kurt L. Schmoke’s request the 1991 merger of BEDCO and CCIH which emerged as the Baltimore City Development Corp., he resigned to pursue private sector opportunities.

Mr. Gillece then joined what was then W.C. Pinkard, a Baltimore family-owned real estate firm as executive vice president, and in 2003 was appointed president of what became Colliers Pinkard.

Following mergers with several other commercial real estate firms, the company became Cushman & Wakefield, where Mr. Gillece was a managing director until his retirement several years ago.

“It was a fine career,” said M. Jay Brodie, former city housing commissioner who served as BDC president for 16 years before retiring.

“To use a phrase that I’m fond of, David was a first-rate professional who knew many things, did his research, and knew what he was doing. He was just excellent and was always a pleasure to deal with.”

“He was an efficient and firm mentor to young people and they flocked to his office,” Mr. Pinkard said. “He led by example and with humility and he had a great sense of humor and patience.”

Mr. Gillece sat on innumerable boards including the Greater Baltimore Committee, Downtown Partnership of Baltimore and St. Frances Academy.

“He left his mark on Baltimore,” said his wife of 41 years, Nancy Roberts, a lawyer.
“Baltimore was his hobby.”

The former Roland Park and Silo Point resident was an avid fan of the Orioles and Ravens.
A funeral Mass was offered Thursday at the Holy Cross Catholic Community of South Baltimore.

In addition to his wife, he is survived by a son, Patrick R. Gillece, of Bethesda; a daughter, Casey Gordon, of Winnetka, Illinois; two sisters, Joan Gillece, of Annapolis, and Nancy Gillece, of Frederick; and five grandchildren.

The former Riderwood resident was 95.

“Jack was a fine lawyer and one of the best that you’ll ever find,” said former Chief Judge Robert M. Bell of state Court of Appeals, now the Supreme Court of Maryland, who was hired by Mr. Jones at what was then Piper and Marbury, now DLA Piper.

“He was a great mentor and believed in the power of mentoring in order to get to the right answer,” said George P. Stamas who worked with Mr. Jones at Piper.

John Martin Jones Jr. son of Dr. John M. Jones Sr. a chiropractor, and Nannalee Jones, a hotel manager, was born in Baltimore and raised on Greenmount Avenue.

After graduating from Friends School of Baltimore in 1947, he earned a bachelor’s degree in 1951 from the University of Maryland and his law degree in 1953.

He joined Piper and Marbury in 1954.

From 1959 to 1960, he was an assistant Maryland attorney general before returning to Piper in 1960.

“His basic legal practice was that of a real estate lawyer,” said Mark Pollack, who was hired at Piper by Mr. Jones. “He was my mentor and the most delightful lawyer to work with and he was a great negotiator.”

One of the capstones of his career was working with developer James W. Rouse in the early 1960s to acquire the Howard County farmland that became today’s Columbia.

Frustrated by three landowners — identified by Rouse aides as the “Three Bears” — who held 1,000, 900 and 890 acres that were key to the project, Mr. Rouse was worried if word leaked out to owners of smaller parcels, the $1500 per acre price he was offering might rise. He turned to a “lanky young lawyer to help solve the riddle and direct the buying campaign,” wrote Gurney Breckenfield in “Columbia And The New Cities.”

Mr. Jones made the decision to avoid the Three Bears initially while purchasing other parcels of land.

Isidore Gudelsky held the key parcel of 1000 acres, which would become Columbia’s town center, shopping district and lake site, and was asking $5 million for it.

Mr. Jones agreed to meet Mr. Gudelsky at what was then Friendship Airport before he boarded a flight.

With the clock ticking, Mr. Gudelsky agreed to accept Mr. Jones’ offer of $3 million. “This was a critical piece of the deal and Jack cornered him at the airport and wrote the terms of the sale on a napkin,” Mr. Pollack said.

In 1989, Mr. Jones purchased a controlling interest in Baltimore Contractors Inc. and became president, CEO and board chairman.

A world traveler, he was a voracious reader of British history, philosophy and theology — particularly Buddhism.

“He was a great storyteller who could make anything come to life,” said his stepdaughter, Martha Nesbitt Turner, of Baltimore.

Services are private.

Mr. Jones is survived by his wife of 55 years, Dayle F. Nesbitt,  president of the board of Baltimore Choral Arts; two sons, David M. Jones, of Warwick, Rhode Island, and Jeffrey W.A. Jones, of St. Augustine, Florida; a daughter, Kelly A. Jones, of Tallahassee, Florida; two stepsons, William F. “Bill” Nesbitt, of Riderwood, and H. Scott Nesbitt, of Cincinnati; 14 grandchildren; five great-grandchildren; and two nephews. His daughter, Cathleen Celeste Jones died in 2005.

Strictly speaking, you don’t need a credit score to buy a house. If you’re paying cash, for example, no one necessarily cares whether you have good credit. However, if — like most aspiring American homeowners — you’ll need financing, then your credit score is crucial.

Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: Typically, the higher your score, the lower the interest rates and better terms you’ll qualify for.

So, what is a good score if you want to buy a house? It depends on the type of mortgage you’re seeking: Many loans vary when it comes to the credit score needed to qualify. Generally speaking, you’ll likely need a score of at least 620 — what’s classified as a “fair” rating — to qualify with most lenders. With a Federal Housing Administration (FHA) loan, though, you might be able to get approved with a score as low as 500.

Why your credit score matters to lenders

Your credit score helps lenders determine your ability to repay the mortgage — and, subsequently, their risk in extending you the loan. The higher your score, the less risk you present.

Another number that mortgage lenders examine carefully is your debt-to-income ratio (DTI), or your percentage of monthly debt obligations relative to how much income you bring in. To illustrate, if you earn $4,000 per month and have $1,250 in credit card bills, loan payments, housing costs and other debts, your DTI ratio would be 31 percent. The ideal ratio is typically less than 36 percent, though some lenders will accept more with a higher down payment.

Credit score needed to buy a house, by mortgage type

There’s no single, specific credit score that will automatically qualify you for a mortgage (though having the maximum score of 850 certainly never hurts). However, while lenders might not set precise qualifying numbers, they do have minimum credit score requirements.

The minimum credit score to be eligible for a mortgage depends on both the lender and the type of loan.

—Conventional loans: Conventional loans are mortgages that aren’t offered or backed by a U.S. government agency; they’re offered by commercial banks and savings-and-loan associations. Generally, the higher your credit score, the more likely you’ll qualify for a mortgage loan with these lenders. Many will accept a credit score as low as 620, but they may have other requirements for those borrowers, such as a higher income or a larger down payment.

—FHA loans: The Federal Housing Administration insures loans geared toward borrowers with lower credit scores and down payments, especially first-time homebuyers. You might qualify for an FHA loan with a credit score of 500 to 579, with a 10 percent down payment, or with a 3.5 percent down payment if your score is 580 or higher.

—USDA loans: The U.S. Department of Agriculture guarantees this loan program for low- to moderate-income borrowers purchasing a home in a qualifying rural area. Borrowers generally need a minimum score of 640 to qualify for a USDA loan. In some cases, USDA lenders may consider a lower score with additional analysis of a borrower’s credit.

—VA loans: Guaranteed by the U.S. Department of Veterans Affairs, VA loans are offered to active and veteran military personnel and their families. The government doesn’t have a minimum credit score requirement to qualify for VA loans, though many lenders — who actually extend the financing — require a minimum score of 620.

—Jumbo loans: Jumbo loans are larger-than-normal-size mortgages that exceed the conforming loan limits established by Freddie Mac and Fannie Mae — $766,550 in most markets, as of 2024. Many jumbo lenders require a credit score of 700 or higher to qualify because of the increased risk that comes with borrowing such a large amount.

What is a good credit score for buying a house?

When considering the best credit score to buy a house, many lenders use the FICO model. It grades consumers on a 300 to 850 point range, with a higher score indicating less risk to the lender. FICO scores range as follows:

—800 or higher: Exceptional

—740-799: Very good

—670-739: Good

—580-669: Fair

—579 or lower: Poor

How your credit score affects your mortgage rate

Although it’s up to specific lenders to determine what score borrowers need to receive the lowest mortgage interest rates, a difference of just a few points on your credit score can sometimes affect your monthly payments substantially. For example, on a $300,000 mortgage, the difference in principal and interest payments between a 7 percent interest rate and a 6.5 percent rate is $99 per month. That comes out to more than $35,000 over the course of a 30-year mortgage term.

“A low credit score can make it less likely that you would qualify for the most affordable rates, and could even lead to rejection of your mortgage application,” says Bruce McClary, senior VP of communications for the National Foundation for Credit Counseling. “It’s still possible to be approved with a low credit score, but you may have to add a co-signer or reduce the overall amount you plan to borrow.”

A co-signer would be responsible for the debt, so it’s not always easy to get someone to agree. Plus, if you miss payments, it could damage your co-signer’s credit — and your relationship with them.

Here’s how much you’d pay at the current rates for each credit score range. These examples are based on national averages for a 30-year fixed mortgage loan of $300,000.

Bankrate’s loan comparison calculator is a handy tool to help you see interest rates for credit scores. You can also use Bankrate’s mortgage APR calculator to run the numbers and see what your monthly mortgage payment might look like with different APRs.

How to improve your credit score

Before you look at houses, it’s smart to check your credit score and pull your credit reports from the major credit agencies. Addressing credit issues early on can help you raise your score before you apply for a mortgage.

If your credit score isn’t great, there are still options. Instead of settling for the mortgage rates you currently qualify for, consider postponing homeownership and working to boost your credit score and improve your options. Here are some quick tips to help:

1. Check your credit report and correct any errors

Before applying for a mortgage, request a copy of your credit reports from the three major credit agencies: Experian, Equifax and TransUnion. You can access your credit reports from each bureau for free once per year. If you find inaccurate or missing information, file a dispute with the credit reporting agency and the creditor. Clearly identify each item you’re disputing and be sure to include supporting documents.

2. Pay down credit card balances

Your credit utilization ratio is the amount of debt you have compared with your available credit. To calculate this, divide the amount of debt into the amount of available credit. If you have $10,000 in debt and $20,000 in available credit, for instance, your credit utilization ratio is 50 percent. Lenders like to see credit utilization of 30 percent or less.

3. Pay all bills on time

Your payment history accounts for 35 percent of your credit score. While late payments stay on your credit report for seven years, their impact on your score diminishes over time.

4. Don’t close older credit lines after paying them off

Closing unused accounts sounds like a good idea, but it may raise your credit utilization ratio and cause your credit score to drop.

5. Don’t open any new lines of credit or take out large loans

Generally, the less debt you have, the better off you are when you apply for a mortgage. FICO recommends not opening new credit accounts to increase your credit utilization ratio, because each credit request can lower your score slightly. Once your credit has improved, it’s fine to rate-shop, but keep it within a 30-day window — spreading out the rate inquiries can hurt your score. You can also use Bankrate’s mortgage calculator to estimate your monthly mortgage payments.

FAQs

—Can I get a mortgage with a low credit score? Maybe — it is possible to get a mortgage with a low credit score, but it’s more challenging. For example, FHA loans might allow a score as low as 500, but will require a much higher down payment in exchange. When seeking a mortgage with a low credit score, you’ll likely pay higher interest rates and higher monthly payments. Lenders may also be more stringent about other aspects of your finances, too, such as your DTI ratio.

—Will I get a better deal on a mortgage with a higher credit score? Probably. Credit score is certainly not the only factor at play when lenders look at mortgage applications, but generally, a higher score will allow you to secure a lower mortgage rate. Typically, conventional lenders want to see a score of at least 620.

(Visit Bankrate online at bankrate.com.)

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