Fannie Mae removed its minimum 620 credit score for eligibility effective November 16, 2025. But it still considers scores heavily in its analysis, so not much will change.
Starting Nov. 16, 2025, Fannie Mae is scrapping its minimum credit score of 620. In doing so, it's making a change that Freddie Mac adopted several years ago.
However, removing the 620 floor doesn't mean that anyone with a pulse can be approved. Most borrowers will still need a decent credit score of 620 or higher, and only a few will benefit from new rules.
What's Changed?
Previously, Fannie Mae's rules were as follows:
- A single borrower had to have a credit score of 620 or higher
- Two or more borrowers on an application had to have an average score above 620
(Note that a 620+ score didn't mean automatic approval, just the ability to be considered.)
Now, that hard floor has been removed. Again, that doesn't mean all credit scores will be approved.
Fannie's move affects those who are creditworthy but are unfairly blocked from borrowing by the 620 rule.
Some borrowers have strong compensating factors. For example, someone with 50% down a $1 million in the bank could not be approved with a 619 score.
Other benefitting borrowers likely have "thin" credit reports or non-traditional credit histories.
A thin credit file arises when someone has done little or no borrowing over the last seven years. Credit bureaus have nothing to go on when attempting to establish a score.
Ironically, no score could mean a great mortgage candidate.
They might be young without many borrowing opportunities, but very responsible with non-debt obligations like rent and utilities. Or, they could be elderly without need to borrow in recent years.
Or, they could be Dave Ramsey fans with massive savings and an aversion to debt.
Enter non-traditional credit.
A non-traditional credit history is one where a lender checks past payments on accounts that are often not reported to credit bureaus. So, a lender might be impressed by a sparkling record of on-time payments to landlords, insurers, schools for tuition, childcare providers, and suppliers of things like utilities and cellphone, internet and cable services. The mortgage company will also study bank statements and other financial records.
This provides a more holistic view of some applicants' ability to manage money well than a raw credit score.
The DU Decisionmaker
The Fannie Mae announcement revolves around its algorithmic approval system Desktop Underwriter® (DU®). They've re-trained the system not to kick-out files with scores below 620.
Fannie says of the system, "Building on 30 years of digital underwriting innovation, DU is a powerful tool to help lenders assess credit risk."
The system has never rubber-stamped loan files when the applicant has a 620 score. It uses dozens if not hundreds of factors to determine approval status. That won't change.
This seemingly groundbreaking announcement essentially means business as usual for most applicants.
Still, a DU approval will give lenders the confidence to fund a loan with a 600 or 610 score. Otherwise, they might automatically pass on it or flip it to an FHA loan due to the credit score itself. So it could help some lower-credit borrowers who don't want FHA.
Why the Change?
The government is actively seeking ways to widen access to homeownership.
Freddie Mac has been able to work around the 620 rule for years without apparent consequences. So, this may be a low-risk way to help onto the housing ladder those who are highly creditworthy but couldn't previously prove it.
Meanwhile, National Mortgage Professional, a mortgage trade journal, suggests another reason: "Research shows that reliance on traditional credit score models can ... have a discriminatory impact on communities of color, potentially locking out otherwise qualified borrowers from the housing market."
And if the change results in more underserved borrowers getting into homes, then it's a really good thing.
