Fannie Mae Gets Rid Of Credit Score Minimum...

...which might have slid past a lot of people with so much other news recently

Loans submitted after November 15, 2025 are subject to the new rule

Prior to that, a minimum score of 620 was required

and for borrowers on the fringe of that number

this is really, really good news

the credit score models heavily weight collection items

and as "new credit events" they can dramatically drop scores 50-100 points

taking seemingly well qualified loan applicants out of the home buying game

and the crazy part is that it might just something like

a forgotten cable bill or medical billing for less than $100

the componenent of the mortage application

that continues to matter most is the debt to income ratio (DTI)

which is a comparison of a borrowers income (before taxes)

and their recurring monthly bills such as student loans, car loans, and credit card debt

45% DTI is the line in the sand for most loan programs

there are some compensating factors that may allow a 50% ratio

a qualified lender can be a real asset for those in that situation

lower interest rates would definitely help those with high DTI

as it would reduce the housing payment portion of the calculation

I don't see a downside to all of this

it's just great news

tune in for my tips to take advantage of this big change for home buyers