I get this question more than people would guess. You pay rent on time, you pay your phone bill, you have savings, and you have never borrowed a dime. Then a lender pulls credit and tells you there is no score. That is not the same as bad credit, and it is not a dead end. If you are just starting out, read our Arizona first time home buyer guide for the big picture, then use this page for the no credit specifics. Everything below comes from HUD Handbook 4000.1 and the Fannie Mae Selling Guide, both checked October 30, 2026.

One thing to clear up first. Having no score is different from having a low score. If your credit report produces a score, even a low one, the rules on this page do not apply to you, and our guide to what credit score you need to buy a house in Arizona is the better read.

How FHA handles a buyer with no credit score

FHA lets you buy with no credit score as long as the loan is manually underwritten and you can show a real payment history. HUD Handbook 4000.1 says borrowers with nontraditional or insufficient credit histories are eligible for maximum financing but must be underwritten using its manual underwriting procedures. Maximum financing on an FHA purchase is the familiar 3.5% down.

The lender has two ways to build your history. It can order a Non Traditional Mortgage Credit Report from a credit reporting company, or it can verify your references itself. Either way, HUD requires three credit references, and at least one has to come from this list:

• Rental housing payments, verified independently if you rent
• Telephone service
• A utility not included in your rent, such as gas, electricity, water, television or internet

If you cannot fill all three spots from that list, HUD allows other recurring payments, including insurance premiums that are not payroll deducted, child care paid to a business, school tuition, store credit cards, rent to own payments, the part of medical bills insurance did not cover, an auto lease, a written personal loan backed by canceled checks, a 12 month history of paying an account where you are an authorized user, and a 12 month savings history with deposits at least quarterly that were not payroll deducted and caused no insufficient funds checks.

Proof matters. For references the lender verifies itself, HUD wants the most recent 12 months of canceled checks or equivalent proof of payment. For rent, it wants a reference from the rental management company covering the last 12 months, as long as you are not renting from a family member. If your landlord is your aunt, plan on that reference not counting.

How a conventional loan handles no credit score

Fannie Mae allows a conventional loan with no credit score, but the rules are tighter than FHA's on a manual file. Fannie Mae Selling Guide section B3-5.4-01 says the lender must first check all three major credit repositories and confirm the missing score was not caused by a wrong name, Social Security number or address. If one or more borrowers has no score and relies on nontraditional credit, a manually underwritten loan must meet these rules:

• One unit home you will live in as your principal residence
• A purchase or limited cash out refinance
• Loan amount within the baseline conforming limit, which FHFA set at $832,750 for 2026, so high balance loans are out
• Maximum debt to income ratio of 36%
• No minimum reserves if at least one borrower documents a housing payment history as a reference, otherwise 12 months of reserves

Section B3-5.4-02 sets the count: four nontraditional credit references for each borrower without a score on a manually underwritten loan, or three on a HomeReady loan. Payments have to be due at least every three months, and the lender interviews you to cover the most recent 12 months. If a co-borrower has no references at all, the loan can still work as long as no more than 30% of the qualifying income comes from that person.

There is also an automated route. When no borrower has even one credit account on the report, Fannie Mae's Desktop Underwriter can still evaluate the loan for a one to four unit home that every borrower will live in. In some cases DU runs a cash flow assessment and lets a third party asset verification report satisfy the requirement, and then no separate nontraditional references are needed. Whether your file qualifies for that is something we find out by running it, not something I can promise up front. If you want to understand the reserves piece, see how many months of mortgage reserves lenders want in Arizona, and our conventional loans page covers the 3% down options.

FHA vs conventional with no credit score

For most first time buyers with no score, FHA is the easier path because it needs fewer references and allows a higher debt ratio. Conventional can still win if you have strong savings and low debts.

Sources: HUD Handbook 4000.1, last revised August 12, 2026; Fannie Mae Selling Guide B3-5.4-01 (11/05/2025) and B3-5.4-02 (02/04/2026); HUD FHA limits lookup and FHFA 2026 conforming limit. All checked October 30, 2026. The automated DU route has different rules and is not shown.

VA buyers have their own path too. If you are an eligible veteran, ask about it, because VA can mean 0% down. Our FHA loans in Arizona page covers the FHA side in more depth.

Run your own numbers

What no credit score does to your budget

The biggest change is the ratio cap. On FHA, HUD Handbook 4000.1 says borrowers with no credit score may not exceed 31/43, meaning the total house payment can be up to 31% of gross monthly income and all monthly debts, house payment included, up to 43%. Energy efficient homes can stretch to 33/45. A buyer with a score of 580 or higher can sometimes go higher with compensating factors, but a buyer with no score cannot.

Simple percentages of an example income, not a quote. The house payment includes principal, interest, taxes, insurance, mortgage insurance and HOA dues.

Two more rules shrink the budget on FHA. Only income from borrowers who will live in the home and sign the mortgage counts toward those ratios, so a parent who co-signs but will not live there cannot add income on a no score FHA file. And if you buy with someone who does have a score, HUD has the lender use the lowest decision score among the borrowers who have one. Our debt to income guide shows how lenders add up the monthly debts.

How to get ready to buy with no credit score

Start gathering 12 months of proof now, before you talk to a lender. These files move at the speed of your paperwork.

1. Confirm you truly have no score. A lender has to check all three bureaus. Sometimes a thin file still produces a score, and that changes the rules.
2. Get your rent history in writing. A rental management company reference covering 12 months, plus bank statements or canceled checks that show the payments clearing.
3. Collect 12 months of utility and phone payments in your name, paid from your own account.
4. List every other recurring bill you pay: car insurance, renter's insurance, child care, tuition.
5. Keep your debts low. With a 43% or 36% cap, a new car payment can cost you more house than you think.
6. Save for reserves if you might go conventional without a documented housing history.
7. Take homebuyer education early. Fannie Mae's no score rules point to its homeownership education requirements, so plan on it. Our homebuyer education guide explains the options.
8. Get pre approved by a lender who does manual underwriting. Not every lender will. As a broker, we can shop the ones that do.

Should you open a credit card first and wait for a score? Sometimes. If you are a year or more away, building traditional credit gives you more loan options and better pricing. If you are ready now and your rent and bills are clean, the nontraditional path can get you there sooner. If you are shopping in the West Valley, our Surprise first time buyer guide shows what typical homes cost there right now.

Sources

All sources checked October 30, 2026. Guidelines change, so confirm before you rely on them.

1. HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook (last revised August 12, 2026): II.A.5 Manual Underwriting of the Borrower, nontraditional and insufficient credit, approvable ratio requirements; minimum decision credit score and LTV, checked October 30, 2026
2. Fannie Mae Selling Guide B3-5.4-01, Eligibility Requirements for Loans with Nontraditional Credit (11/05/2025), checked October 30, 2026
3. Fannie Mae Selling Guide B3-5.4-02, Number and Types of Nontraditional Credit References (02/04/2026), checked October 30, 2026
4. HUD FHA Mortgage Limits, Maricopa County, CY2026, checked October 30, 2026
5. FHFA, Conforming Loan Limit Values for 2026 (November 25, 2025), checked October 30, 2026
6. Freddie Mac, Primary Mortgage Market Survey, October 29, 2026 (calculator default rate), checked October 30, 2026

Pillar Mortgage Group, LLC. NMLS #2700076. Arizona License MB-2009671. Blake Hermann, NMLS #2271358. Equal Housing Lender. This article is education, not a loan offer or a commitment to lend. All loans are subject to credit approval, and rates, limits and programs change without notice.

Frequently asked questions