Fannie Mae Removes 620 Credit Score Requirement — What It Means for Homebuyers (2025)

As of the weekend of November 15–16, 2025, Fannie Mae updated its Selling Guide and its automated underwriting tool (Desktop Underwriter, DU) so that a minimum representative credit score of 620 is no longer required for single-borrower or multi-borrower loan casefiles submitted on or after that date. In short: while previously many conventional loans backed by Fannie Mae required at least a 620 FICO score to be eligible for approval, now the rule is gone and DU will instead evaluate the full risk profile of a borrower.

Key take-aways:

• Fannie Mae will no longer enforce a hard 620 credit-score minimum for conventional loan casefiles.

• Lenders submitting to DU can now present borrowers with scores below 620—though approval is not guaranteed.

• The change does not mean the underwriting standards have diminished; rather, the evaluation becomes more holistic (income, debt, credit behaviour, assets).

• The effective date: loans submitted or resubmitted to DU on or after the weekend of Nov. 15, 2025 (and new casefiles created on or after Nov. 16 for the 620-rule removal) .

Why This Matters for Home Buyers

This is a meaningful shift, especially for home buyers who were previously blocked by the “620 barrier.” Here’s what it could mean in practice:

Expanded Access

• Buyers with credit scores below 620 (but who have steady income, low DTI, savings, and recent payment history) now may get a closer look from lenders rather than an automatic denial.

• First-time buyers, younger buyers (shorter credit history), renters who have paid on time but lacked major credit lines, and others who didn’t hit the 620 mark may see more opportunities.

• In markets like Atlanta or Asheville, where affordability is already tight, this opens the door for more qualified buyers to enter the conventional lending space rather than being forced into higher‐cost or non-conforming products.

What Remains Important

Despite this change, other underwriting criteria remain critical and unchanged:

• Debt-to-Income (DTI) ratio

• Loan-to-Value (LTV) ratio and down payment

• Credit history (not just score): late payments, delinquencies, bankruptcies still matter

• Employment/income stability, assets and reserves

• Property eligibility and other program rules

In other words: a lower credit score doesn’t guarantee approval—it simply means the process may be more favourable for some borrowers.

Opportunity & Caution

• Opportunity: For a buyer who has a score of, say, 590 or 600, but has impeccable recent payment history, low debt, and a reasonable down payment, this change may mean a conventional loan is now viable.

• Caution: Lenders may still impose internal overlays (some may still require 620 or higher based on their policies or the product/PMI requirements). Additionally, loan pricing may still penalize lower credit scores via higher interest rates or fees.

What This Means for You if You’re Buying in Atlanta or Asheville

If you’re working with buyers in Atlanta, GA or Asheville, NC, here’s how to talk about this change:

• Highlight to clients who might have previously been told they “don’t qualify for conventional because your score is under 620” — “That may not be the case anymore; let’s run your full profile.”

• Use this as a motivator: “Let’s gather your credit report, look at your pay-down history, savings, all your assets. Even if your score is under 620, you may still be eligible.”

• Emphasize: We still need to look at all pieces of your profile—down payment, debt, income, reserves. Score is one element, but no longer an automatic blocker.

• If they’re considering FHA (which has its own requirements) or higher-cost mortgage options because they thought conventional was off the table, re-assess with this update in mind.

What You Should Watch Out For

• Lenders may still require internal minimums or overlays. Just because Fannie Mae removed the 620 minimum doesn’t mean every lender will drop it.

• Even with approval, pricing may be less favourable (higher rate, more fees) for

  borrowers with weaker credit profiles.

• Alternative credit/data may still be required if a borrower lacks traditional credit lines (e.g., rent/utility payment history). Fannie Mae

• This change is about eligibility, not rate guarantees. Buyers still need to manage other risk factors.

• Ensure the casefile is submitted to the correct DU version (Version 12.0) as required by Fannie Mae’s release.