"Instead of applying a minimum score, DU will use its own analysis of borrower risk factors to determine loan eligibility. Fannie Mae also updated requirements for documenting nontraditional credit and homebuyer education. The DU system will notify lenders when they need to establish a nontraditional credit history or require homebuyer education in cases where a borrower has no traditional credit or installment account on record."
"I also think that [Fannie Mae] is signaling to the credit providers that they have enough borrower data now that other options are coming besides a credit report. Think about it, when you access a borrower's bank statement, how much data can you validate from that? A lot, you see it all in real time."
"I have always said there is more to a borrower than their credit score and have been a fan of incorporating alternative criteria to qualify their ability to repay. HOWEVER, this move will bring in lots of unknowns' for lenders, and I have deep concerns over how we can ensure every lender is applying the same guidelines and criteria for utilizing alternative trade lines. Also, the lack of transparency on this new model' or how to price the loans can welcome bad actors into the mix."
Fannie Mae will change Desktop Underwriter (DU) effective the weekend of Nov. 15, 2025, replacing minimum credit score thresholds with DU's own analysis of borrower risk factors to determine loan eligibility. Requirements for documenting nontraditional credit and homebuyer education were updated. DU will notify lenders when nontraditional credit histories or homebuyer education are required for borrowers without traditional credit or installment accounts. Industry reaction included views that the change could expand access for borrowers with thin or no credit files and that bank-statement data may be more informative. Other experts raised concerns about underwriting consistency, transparency, pricing and potential for bad actors.
Read at www.housingwire.com
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