Cue the applause and maybe a few confetti cannons, because Fannie Mae just dropped a game-changing announcement that could shake up the mortgage world. For years, borrowers had to meet a minimum 620 credit score to qualify for a conventional loan under Fannie Mae’s guidelines. But starting November 16, 2025, that rule is officially out the window.
That’s right — the “sorry, your credit score isn’t high enough” conversation may finally be heading toward retirement.
What Exactly Changed
According to Fannie Mae’s official Selling Guide update (Announcement SEL-2025-09), the 620 minimum credit score requirement will no longer apply to loans underwritten through Desktop Underwriter® (DU), their automated loan evaluation system.
Instead of fixating on one magic number, DU will now take a more holistic approach to evaluating creditworthiness. That means payment history, debt levels, income stability, and other financial factors will play a larger role in determining whether a borrower qualifies — not just the three-digit score on their report.
(Sources: Fannie Mae Announcement SEL-2025-09, HousingWire, National Mortgage News, MPA Magazine)
What This Means for Homebuyers
This change is a big win for buyers who have been stuck on the sidelines because their score didn’t make the cut. Here’s why it matters:
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Don’t assume you can’t qualify: Borrowers with credit scores below 620 may now be eligible for Fannie Mae-backed loans, provided the rest of their financial profile is strong.
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Expanded opportunities for first-time buyers: Especially for renters who pay on time but haven’t built up traditional credit. DU can now consider alternative factors like rent payment history.
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“It’s not just about your score anymore.” People who’ve been working to rebuild credit or have limited credit history now have a path forward. DU looks at your full financial picture, including income, debt-to-income ratio, payment history, and cash reserves.
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“Talk to a lender who understands the update.” Some lenders still apply their own overlays (extra rules), so work with one familiar with the new guidelines.
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“Let’s run your scenario.” Whether you’re a first-time buyer or coming back after credit challenges, now is the time to explore your options.
Of course, this isn’t a free pass. Credit still matters, and lenders will still review credit reports. But the “you must be this tall to ride” rule is gone, and that’s a major step toward a more inclusive lending environment.
What This Means for the Real Estate Market
Increased loan accessibility means more potential buyers entering the market — and that’s good news for both real estate agents and sellers.
In Florida, where competition is already strong, this could bring even more qualified buyers into the pool. That may help boost demand across a range of price points, especially in lifestyle-driven communities like Lakewood Ranch and Esplanade Golf & Country Club where you see a mix of first-time, relocation, and investment buyers.
For investors, this might mean it’s time to keep an eye on shifts in buyer demand — more approvals could translate to faster sales and, in some areas, rising home values.
What This Doesn’t Mean
Let’s clear up a few misconceptions before the rumor mill kicks into overdrive:
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Fannie Mae didn’t eliminate credit scores altogether. Lenders will still pull credit for every borrower.
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This doesn’t mean everyone gets approved. DU still analyzes overall risk — low scores combined with high debt and low income still spell trouble.
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Not all lenders will adopt this immediately. Some may keep the 620 minimum or set their own limits, especially for risk management.
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Loan pricing still factors in credit risk. A lower score may qualify, but it could come with a higher rate or cost.
The Bottom Line
This move by Fannie Mae represents a major shift in how borrowers are evaluated. Instead of letting one number decide your financial fate, lenders can now consider the bigger picture, a welcome change for buyers who’ve worked hard to recover from credit setbacks.
For real estate pros like me, this is the perfect conversation starter:
“Thought your credit was too low to buy a home? Think again. Let’s find out if these new rules put homeownership back within reach.”
So, if you or someone you know has been holding off because of credit worries, it’s time to dust off those home buying dreams and take another look.
