Fannie Mae Removes Minimum Credit Score Requirement

What Homebuyers Need to Know About the 2025 DU Update

The mortgage world is gearing up for one of the most significant changes in qualification standards in years. Fannie Mae has announced that beginning in November 15 2025, Desktop Underwriter (DU) will no longer require a minimum credit score to evaluate a borrower for mortgage eligibility. This shift marks a substantial move toward a more holistic, fair, and inclusive method of assessing borrower risk.

What’s Changing?

Historically, borrowers needed a minimum 620 credit score for loans eligible under Fannie Mae’s guidelines. Under the new update, DU will instead use a comprehensive analysis of financial behavior and stability to determine approval, rather than relying on credit score alone.

This does not eliminate the importance of credit history. Instead, it shifts focus to broader risk indicators such as:

  • Consistency of on-time housing payments

  • Employment and income stability

  • Available cash reserves

  • Debt-to-income ratio

  • The depth and reliability of credit patterns, including non-traditional credit

Non-Traditional Credit Will Play a Larger Role

For borrowers with limited or no credit history, DU will now guide lenders on how to document non-traditional credit, including:

  • Rent payments

  • Utility and phone bills

  • Car insurance payments

  • Subscription or recurring billing history

This is particularly meaningful for:

  • First-time homebuyers

  • Individuals who avoid debt and prefer paying in cash

  • Immigrants and recent residents building U.S. credit

  • People recovering from past credit challenges but currently demonstrating strong payment habits

A Critical Clarification: Lenders Can Still Set Their Own Rules

While Fannie Mae is removing the score requirement, lenders still control their internal credit overlays.
Many lenders may continue to require minimum scores until they adapt their underwriting philosophies and risk management structures. Expect a transition period where some lenders adopt the change sooner than others.

What This Means for the Market

This update has the potential to expand access to homeownership, particularly for buyers who have been discouraged by traditional scoring systems. It aligns mortgage assessment more closely with real-life financial behavior, not just a three-digit number.

If You’re Planning to Buy in the Next 12–24 Months

This is the time to:

  • Document rental and bill payment history

  • Establish consistent financial patterns

  • Understand your debt-to-income positioning

Want personalized guidance?

Call us today and we’ll evaluate:
• Your current financial profile
• Where you stand today
• What to track now to be ready later

No pressure. Real clarity.

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