Fannie Mae’s Big Update: You May Qualify Even With a Credit Score Below 620

Fannie Mae’s Big Update: You May Qualify Even With a Credit Score Below 620

What’s Changing

Fannie Mae — one of the main government-sponsored enterprises (GSEs) that buys and guarantees mortgages — has made an important update to how credit scores are handled in its Desktop Underwriter (DU) system.

Traditionally, most conventional loans required a minimum credit score of 620 for automated approval. But under the new policy, DU will now allow lenders to run automated approvals even for borrowers with scores below 620.

That doesn’t automatically mean every buyer under 620 will qualify — but it does mean the system can now consider a wider range of applications instead of automatically rejecting them.

What This Means (In Plain English)

Think of Fannie Mae’s automated system like a teacher grading tests.
Before, if your score was below 620, you didn’t even get your test graded — you were automatically disqualified.

Now, the teacher will actually review your work and look at the whole picture, not just your score.

That means DU can now weigh:

• Your debt-to-income ratio (DTI)

• Savings and assets

• Employment stability

• Payment history on other accounts

If those factors show strong credit behavior, the system may still approve your loan — even with a lower score.

Why Fannie Mae Made This Change

The goal is to make homeownership more accessible and reflect how people actually manage their finances today.

Many borrowers with lower credit scores are still responsible payers, but may have had challenges such as medical debt, short credit history, or student loans.

By removing the hard 620 barrier in its automated system, Fannie Mae is allowing lenders to evaluate applicants more fairly — based on real risk, not just a single number.

What It Doesn’t Mean

This change does not mean:

• Every lender will automatically approve credit scores under 620.

• Manual underwriting or lender-specific overlays disappear.

• You’ll qualify for the same terms as someone with higher credit.

Lenders can still apply their own minimum score rules, and loan approval will depend on the overall strength of your file.

What Buyers Should Do Now

If your credit score is below 620:

1. Don’t assume you’re out of options. Your lender can now run your file through DU to see if it gets an approval.

2. Focus on your overall profile. Keep balances low, make all payments on time, and show consistent employment.

3. Talk to your lender. A pre-approval can now reveal possibilities that weren’t even reviewable before.

This update could help more first-time buyers and hardworking households finally cross the line from “not eligible” to “approved.”

Have questions or want to see if you qualify under the new DU update?
Just fill out the contact form on this page or give me a call—I’m here to help.