Fannie Mae Just Made a Major Change — And It Could Open the Door for More Homebuyers

There’s big news in the mortgage world, and it could make homeownership more accessible for many buyers who previously felt sidelined. Fannie Mae (FNMA) has announced a major update that removes the minimum credit score requirement for certain loan programs — as long as the loan receives an Approve/Eligible recommendation through their Desktop Underwriter® (DU) system.

This update is a significant step toward expanding access to credit and helping more people achieve the dream of homeownership. Here’s what it means for today’s buyers.

What Exactly Changed?

Historically, buyers needed to meet a minimum credit score to qualify for many Fannie Mae loan programs. That barrier has now been lifted when DU issues an Approve/Eligible decision.

Instead of relying on a specific credit score cutoff, DU will evaluate the borrower’s entire risk profile, which includes:

• Income

• Assets

• Payment history

• Debt-to-income (DTI) ratio

• Loan characteristics

This more holistic approach allows DU to consider strong compensating factors — meaning buyers with limited credit or past challenges may now qualify where they couldn’t before.

Who Benefits Most From This Change?

This update is especially helpful for:

✔ Buyers with limited credit history

People who are responsible with money but don’t have extensive credit lines can now be evaluated more fairly.

✔ Buyers who had past credit challenges

If credit issues are in the rearview mirror but scores haven't fully rebounded, DU may still approve the loan based on the broader financial picture.

✔ Buyers previously told “not yet”

Anyone who was turned down due to a minimum score may now have a path forward.

What This Change Doesn’t Mean

This update doesn’t open the door to risky lending. DU still requires:

• Stable income

• Verified assets

• Responsible debt levels

• A loan profile that meets overall risk standards

The removal of the minimum score simply gives DU more flexibility to approve well-qualified buyers whose credit scores don’t tell the full story.

Why This Matters in Today’s Market

With affordability challenges and tighter inventory, every advantage matters. By widening access to conventional loans, more buyers may be able to:

• Lock in competitive conventional mortgage terms

• Avoid higher-cost loan alternatives

• Enter the market sooner than expected

This Fannie Mae update could be a major turning point for buyers trying to break into the market in 2025.

Thinking About Buying? Now’s the Time to Revisit Your Options

If you or someone you know was previously declined — or you weren’t sure if you would qualify — now is a great moment to take another look.

At Pathways Home Group, we work closely with trusted lenders who can run updated scenarios, review your file, and help you understand your new options.

📞 Give us a call to talk about your homeownership goals,
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👉 Connect with our lenders here: https://pathwayshomegroup.com/mortgage-lender

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