Understanding Fannie Mae's New Credit Evaluation Guidelines Effective November 2025

Fannie Mae is making a significant change to how it evaluates creditworthiness for mortgage applicants. Starting November 16, 2025, the Desktop Underwriter® (DU®) system will no longer require a minimum credit score of 620. Instead, it will use a broader set of data points to assess risk, including rent payments, bill history, and employment records. This shift reflects a move toward a more comprehensive and inclusive approach to lending decisions.

This change will affect many borrowers and lenders, so understanding the new guidelines is essential for anyone involved in the mortgage process.

Fannie Mae Desktop Underwriter system interface

What Is Changing in Fannie Mae’s Credit Evaluation?

Previously, Fannie Mae’s DU system required borrowers to have a minimum credit score of 620 to qualify for many loans. This score acted as a quick filter to determine credit risk. The new guidelines remove this threshold entirely.

Instead, DU will perform a comprehensive risk assessment that looks beyond credit scores. It will analyze:

• Rent payment history

• Utility and phone bill payments

• Employment stability and history

• Other alternative credit data

  
  

This approach aims to capture a fuller picture of a borrower's financial behavior, especially for those who may not have a traditional credit history or have lower credit scores but demonstrate responsible financial habits.

Why Fannie Mae Is Making This Change

The minimum credit score requirement has long excluded many potential homebuyers, especially younger individuals, recent immigrants, or those with limited credit history. By removing this barrier, Fannie Mae hopes to:

• Increase access to homeownership

• Reduce reliance on credit scores alone, which can sometimes be misleading

• Encourage lenders to consider a wider range of financial behaviors

• Support borrowers who have strong payment histories outside of traditional credit

  
  

This change aligns with broader industry trends toward using alternative data to improve lending decisions and reduce bias.

How DU Will Assess Creditworthiness Without a Minimum Score

Without the 620 credit score floor, DU will weigh other factors more heavily. Here’s how the new evaluation will work:

• Rent History: Consistent, on-time rent payments will demonstrate reliability. DU may use data from rent reporting agencies or landlord references.

• Bill Payment History: Regular payments on utilities, phone bills, and other recurring expenses will show financial responsibility.

• Employment History: Stable employment with steady income supports the borrower’s ability to repay the loan.

• Other Financial Behaviors: DU may consider savings patterns, debt-to-income ratios, and other indicators of financial health.

  
  

Lenders will still submit traditional credit reports, but DU’s algorithm will integrate these alternative data points to create a risk profile.

Updates to the Day 1 Certainty® Program and Appraisal Alternatives

Alongside the credit score change, Fannie Mae has updated its Selling Guide with improvements to the Day 1 Certainty® program. This program helps lenders verify borrower data quickly and reduce underwriting risk.

Key updates include:

• Expanded data sources for income and asset verification

• Enhanced fraud detection tools

• New appraisal alternatives, such as desktop appraisals and appraisal waivers, to speed up the loan process

  
  

These changes aim to make mortgage approvals faster and more accurate, benefiting both lenders and borrowers.

Home appraisal report and calculator on desk

What This Means for Borrowers and Lenders

Borrowers with lower credit scores or limited credit history may find it easier to qualify for loans under the new guidelines. Those who have demonstrated responsible payment behavior outside of traditional credit channels stand to benefit the most.

Lenders will need to adjust their underwriting processes to incorporate the new DU risk assessment. They may also need to collect additional documentation related to rent and bill payments.

For both parties, the changes could mean:

• More loan approvals for qualified borrowers previously excluded

• A more personalized evaluation of credit risk

• Potentially faster loan processing times with appraisal alternatives

  
  
  
  

Practical Tips for Borrowers Preparing for the New Guidelines

If you plan to apply for a mortgage after November 2025, consider these steps to strengthen your application:

• Keep a record of your rent payments and ask your landlord if they report to credit bureaus

• Maintain consistent payments on utilities and other monthly bills

• Keep employment records handy, including pay stubs and employment verification letters

• Monitor your credit report regularly to ensure accuracy

  
  

These actions can help DU’s new system recognize your creditworthiness beyond just your credit score.

Person organizing financial documents and bills

Fannie Mae’s removal of the minimum credit score requirement marks a major shift in mortgage lending. By using a broader range of data to assess risk, the new guidelines open doors for many borrowers who were previously sidelined. Understanding these changes and preparing accordingly can improve your chances of securing a mortgage in the evolving lending landscape.