There is some truth to this, but it’s a complicated explanation. Fannie Mae pricing is based on a matrix of credit score and % down for a purchase (or % of equity in a refi). It applies to all of their loans.

The lowest rates are available to all who qualify, BUT the upfront cost to get the lowest rate changes OR a higher interest rate can be taken to offset the upfront cost.
With a credit score above 740, the pricing from 60.01% up to 90% is the same. Lower scores have different pricing hits.

It is true that with a score of 680-699 the hit is less for a 90% loan than an 80% loan; but the 90% loan will have mtg insurance, and it may not even be available in CA, NV, AZ, FL. There are 42 different pricing “boxes” that a borrower can fall into up to a 90% loan. 95% financing is still avail in some states with a score above 680.

When you go above 80% mortgage insurance is required, and it may not be tax deductible to everyone. Most ppl are better off without any MI.

Only the middle credit score of the 3 bureaus is used. The highest and lowest is ignored. (The average of the 3 scores is NOT used as some ppl think) From a score of 620 to 739 every 20 points
can make a difference.
It is often easy to raise a credit score quickly.

With 10% down and a credit score of 740 a FNMA loan is better than FHA if you qualify..in other cases with a lower score, FHA is the only option for many. With only 3.50% down required, FHA isn’t much different than a subprime lender.

It’s truly become more complicated to qualify for a loan and explain the options quickly…HLS