New Mortgage Rules: Do You Still Need a 620 Credit Score to Buy a Home?

For years, one sentence has scared off a ton of would-be homebuyers:

“I don’t have a 620 credit score, so I can’t get a conventional mortgage.”

That “hard 620 minimum” is no longer the simple gatekeeper it used to be—at least on the Fannie Mae side, when the loan is run through Desktop Underwriter (DU).

Let’s break down what changed, what didn’t change, and what you should do next if you’re thinking about buying in Michigan.

What actually changed?

Fannie Mae updated its Selling Guide to align with DU updates so that DU no longer applies a minimum credit score requirement. Instead, DU uses a broader risk assessment to determine eligibility. 

Here are the key timing details that matter:

• New DU loan casefiles created on or after November 16, 2025: the 620 minimum (for single-borrower) and 620 average/median (for multiple borrowers) requirements were removed. 

• Other related DU changes took effect for loans submitted/resubmitted around the weekend of November 15, 2025. 

This lines up with broader reporting that 2026 mortgage qualification is shifting toward more flexible evaluation, including nontraditional credit factors. 

Does this mean “bad credit is fine now”?

No. It means the underwriting engine isn’t using a single cutoff as the first “no.”

A few important reality checks:

1) Lenders can still have their own rules

Even if DU can approve a file without a hard 620 minimum, individual lenders can add “overlays” (their own stricter guidelines).

2) Pricing and mortgage insurance still care about risk

Credit scores may still affect rate, fees, and mortgage insurance costs—so approval and affordability are two different things. 

3) The system may require extra documentation

Fannie Mae’s update also notes that DU may require lenders to establish nontraditional credit history and/or homebuyer education in certain “thin credit” situations—without relying on credit scores to trigger those rules. 

Who might benefit most from this change?

This is most helpful for buyers who are financially responsible but don’t fit the “classic credit score” mold, including:

• “Credit invisible” buyers (no score at all because they don’t use traditional credit)

• Buyers with thin credit files (very limited credit history)

• Buyers rebuilding credit who still have a stable job, manageable debts, and a consistent payment histor

This direction fits the broader industry push toward incorporating more data (including rent payment history in newer scoring models). 

What should buyers do right now?

Here’s the simple play if you’re considering buying in the next 3–12 months:

1. Get pre-approved early (not just “pre-qualified”).

2. Have a lender run your scenario through DU and explain what’s driving the result.

3. Document consistency: job stability, savings, and on-time housing payments matter.

4. Avoid big credit moves right before applying (new cards, big purchases, closing accounts).

Real talk: this update can open doors—but you still want a clean plan so your monthly payment is comfortable.

Michigan angle: what I’m seeing with buyers

In markets like Metro Detroit and surrounding suburbs, buyers win when they’re prepared. Whether you’re shopping in Macomb, Oakland, Wayne, or St. Clair County, the strongest offers come from buyers who already know:

• their true budget,

• their monthly payment range,

• and what loan programs fit their situation.

This rule change is helpful—but the best move is still clarity before you start touring homes.

FAQ

Can I get a conventional loan with no credit score?

Possibly. DU may allow eligibility without a minimum score, and in some cases lenders may build a nontraditional credit profile, depending on your file and lender requirements. 

Does this apply to FHA or VA loans?

This specific update is tied to Fannie Mae DU (conventional financing). FHA/VA have their own guidelines and lender overlays.

Is 620 completely gone forever?

The hard cutoff for certain DU casefiles was removed, but risk-based pricing, MI, and lender overlays can still make lower-score borrowing more expensive—or harder in practice. 

Next step

If you’re wondering whether you can buy a home in Michigan—even if your score is under 620 or you don’t have a score at all—send me a message.

I’ll connect you with a trusted local lender who can run your scenario the right way and map out a clear plan.

Want a quick start? Reply with:

• the city you want to buy in,

• your target monthly payment range,

• and whether you’ve talked to a lender yet.