Fannie Mae is removing minimum credit score requirements from DU
Other related updates will apply to files submitted or resubmitted beginning the weekend of November 15, 2025, a announcement from Fannie Mae said. Rather than applying a minimum score, DU will use its own analysis of borrower risk factors to determine loan eligibility.
Fannie Mae has also updated its requirements for documenting non-traditional credit and homebuyer education. The DU system will notify lenders when they need to establish a non-traditional credit history or require homebuyer education in cases where a borrower does not have traditional credit or a repayment account on file.
Opportunities for borrowers with thin credit files
Several industry experts took to LinkedIn to investigate what the removal of minimum credit score requirements from DU means for the industry. Jon Overfelt, sales director and owner of American Security Mortgage Corp.wrote a post about the update and shared it with HousingWire that the update caught his attention because of how it opens up opportunities for “borrowers with thin credit files and no credit files.”
“I think so too [Fannie Mae] signals to lenders that they have sufficient borrower data now that other options are available in addition to a credit report. Think about it: how much data can you validate from that when you consult a borrower’s bank statement? A lot, you see it all in real time.”
Overfel’s message generated mixed reactions. Leora Ruzin, a certified mortgage banker, noted that she had “so many questions” about the update, including how lenders will underwrite these loans.
“I have always said that there is more to a borrower than their credit score and have been a proponent of including alternative criteria to qualify their ability to repay. However, this move will introduce many ‘unknowns’ for lenders, and I am very concerned about how we can ensure that every lender applies the same guidelines and criteria for the use of alternative lines of trade,” Ruzin told HousingWire.
She continued: “Also, the lack of transparency about this new ‘model’ or about the pricing of the loans could welcome bad actors into the mix. How will these loans impact overall quality when it comes to securitization or credit risk transfer? Does this mean that the credit score spec pools are effectively gone?”
Ruzin also said she hopes Fannie Mae will provide additional guidance before implementing the change. Fannie Mae did not respond to a request for comment at the time of publication.
