Written By Lexx Thornton
Fannie Mae announced a major policy change, effective November 16, 2025, that removes the mandatory minimum credit score for loans submitted through its automated system, Desktop Underwriter (DU). The current 620 minimum representative credit score for loans processed by DU will be eliminated. Instead of relying on a floor score, DU will use its own advanced analysis of the borrower’s risk factors to determine loan eligibility.Â
 This update also expands Fannie Mae’s ability to help lenders document nontraditional credit history and signals when homebuyer education is required for borrowers with thin or no traditional credit files.Â
The goal of this policy shift is twofold:Â
- Increase Access: The change is expected to open opportunities for borrowers with limited or non-traditional credit files to qualify for mortgages.Â
- Break FICO Monopoly: The move supports the Federal Housing Finance Agency (FHFA) push to reduce reliance on the FICO credit scoring model, which supporters argue has led to inflated credit scoring fees.Â
FHFA Director Bill Pulte affirmed that the change is a “big deal for consumers” but insists that underwriting standards themselves remain the same.Â
While the update is applauded by some for potentially breaking the FICO monopoly, it has generated concern among lenders. Industry experts question how consistency will be maintained when underwriting loans without a standardized score minimum, voicing concern over “unknowns” that may affect loan pricing and risk assessment.Â
