Debunking the Rumor: Fannie Mae and Freddie Mac Are Evolving, Not Abandoning, Credit Scores
Recent headlines and social media buzz have sparked confusion, with some claiming that government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac are ditching credit scores entirely in mortgage underwriting. That’s not the case—this is a targeted update to make lending more inclusive while still relying on credit data as a core factor. As of November 14, 2025, both GSEs continue to use credit scores, but they’re removing rigid minimum thresholds and incorporating modern scoring models to better assess risk holistically. Let’s break it down.
What’s Actually Changing?
- Fannie Mae’s Update (Effective November 15-16, 2025): The GSE is eliminating its longstanding 620 minimum middle credit score requirement for purchase and refinance loans processed through its Desktop Underwriter (DU) validation software. Instead, DU will evaluate the full borrower profile—including payment history, debt-to-income ratio, loan-to-value, and reserves—without a hard cutoff. This could open doors for more homebuyers with thinner credit files or past blemishes, potentially adding millions to the market.
- Freddie Mac’s Alignment: Freddie Mac is on a parallel track, planning a similar transition in Q4 2025. Their Loan Product Advisor (LPA) tool will follow suit, dropping minimum score floors while maintaining credit as a key input.
- Shift to VantageScore 4.0: Both GSEs, in coordination with the Federal Housing Finance Agency (FHFA), are adopting VantageScore 4.0 (from Equifax, Experian, and TransUnion) alongside the traditional FICO 8/9 models. This new model uses trended credit data (e.g., payment patterns over 24 months) for a more predictive assessment, but it doesn’t replace scores—it’s an enhancement.
These changes stem from years of FHFA-directed research showing that flexible, data-rich underwriting can reduce defaults without increasing risk. No full abandonment here; credit scores remain “essential” in the process.
What This Means for Borrowers and Lenders
- For Homebuyers: If your middle FICO is below 620, you might now qualify if other factors are strong—but expect scrutiny on stability. Rates and terms could improve for those with scores in the 580-620 range.
- For Lenders: Manual underwriting may rise for edge cases, and servicers must adapt to dual-score reporting (FICO and VantageScore). Disclosures will flag scores as “Not Available” (coded 9999) if they’re missing or invalid.
- Market Impact: Experts predict a 5-10% uptick in eligible loans, boosting affordability amid high rates, but it won’t flood the system with subprime risk.
| Aspect | Before (Pre-Nov 2025) | After (Starting Nov 15, 2025) |
|---|---|---|
| Minimum Score | 620 middle FICO required for DU/LPA approval | No minimum; holistic risk assessment |
| Scoring Models | Primarily FICO 8/9 | FICO + VantageScore 4.0 (phased in Q4) |
| Key Factors | Score as gatekeeper | Score + trended data, DTI, reserves, etc. |
| Goal | Standardize eligibility | Expand access equitably |
In short, this is modernization, not elimination—credit scores are here to stay, just smarter. If you’re shopping for a mortgage, chat with your lender about how this applies to your situation. For official details, check Fannie Mae’s Selling Guide or Freddie Mac’s Single-Family resources. Got a specific scenario in mind?