Summary
Fannie Mae will remove the minimum credit score requirement of 620 for loans processed through its Desktop Underwriter engine. This change may allow more Americans to qualify for home loans, especially those with slightly lower credit scores. However, affordability challenges, like high home prices and mortgage rates, remain a concern.
Key Facts
- Fannie Mae is eliminating the 620 minimum credit score requirement for certain mortgage loans.
- Freddie Mac made a similar change over the last few years.
- Many loans have been denied due to low credit scores, blocking access to homebuying.
- People with credit scores just below 620 might benefit from this change.
- Experts say the change could increase demand for affordable homes, particularly in Southern regions.
- Even with the change, overall homeownership affordability issues persist because of high prices and mortgage rates.
- Home prices in the U.S. have been rising, with a median price of $415,200 in September.
- Borrowers with low credit scores may still face higher interest rates when getting loans.
