Pulte touts move as 'big deal for consumers' but 'small or nothing deal for underwriting'
Fannie Mae has announced it will eliminate the 620 minimum credit score requirement for loans processed through its Desktop Underwriter (DU) system, effective November 16, 2025.
The change, detailed in the latest DU Version 12.0 release notes and Selling Guide update, represents a major shift in mortgage eligibility and could help more borrowers with lower credit scores but solid finances qualify for loans.
Bill Pulte, US director of Federal Housing, noted on Friday on his X account that this would be a small change for underwriting, but a bigger deal for consumers.
"Our underwriting standards are the same," Pulte said in an X post. "As a process matter, to ensure two scores can be used and not just one, we eliminated requirement for FICO in the infamous "guide". Big deal for consumers. Small or nothing deal for underwriting."
Instead of relying on a hard credit score cutoff, DU will now evaluate a broader set of credit risk factors, including a borrower’s credit history, income, debt levels, property characteristics, and loan purpose.
“The DU risk assessment reflects a comprehensive evaluation of credit risk factors from the borrower’s credit report along with non-credit risk factors from the loan application,” Fannie Mae stated in its release notes.
“The minimum representative credit score requirement of 620 will be removed for new loan casefiles created on or after Nov. 16, 2025. This requirement will be replaced with a minimum credit risk standard based on the credit risk factor evaluation within the DU credit risk assessment.”
Fannie Mae’s move follows Freddie Mac, which previously eliminated its own minimum score for loan approvals. However, Fannie Mae clarified that lenders must still request credit scores for all borrowers, as required for loan sales, and certain loan types or private mortgage insurers may continue to impose their own minimums.
The update also expands Fannie Mae’s Day 1 Certainty program, offering lenders relief from enforcement of representations and warranties for certain undisclosed non-mortgage liabilities.
Additionally, documentation and homebuyer education requirements for borrowers without traditional credit will now be triggered only when no borrower has at least one credit or installment account reported.
The changes come as the mortgage sector faces ongoing debates about the relevance of credit scores in risk assessment. While Fannie Mae’s DU and Freddie Mac’s Loan Product Advisor systems increasingly rely on holistic risk models, credit scores remain a required part of the mortgage process for pricing and compliance.
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