What A Shift In Credit Score Requirements Could Mean For Your Mortgage

Finding the perfect listing when you're house-hunting can quickly turn from thrilling to daunting the second you start thinking about getting a mortgage to pay for it. Qualifying for a home loan is especially stressful if you don't have a strong financial history, either because you're a first time home buyer or the rising cost of, well, everything has resulted in a few late payments (or a lot of credit card charges.) Before long, instead of shopping online for new furniture or wondering how you'll get along with the neighbors, you'll be Googling how credit scores work and asking yourself whether your loan application will actually go through. For decades, credit scores have been king when it comes to qualifying for a home loan. Typically, a 620 score or higher is required to qualify for most conventional mortgages. Fortunately for potential buyers, recent updates to both Freddie Mac and Fannie Mae programs are looking past low scores to other credit data, payment histories, proof of steady income, and other qualifications to open doors for hopeful homeowners whose credit score doesn't tell the whole story.

In November 2025, Fannie Mae released a "Selling Guide" announcement, removing minimum credit score requirements for its Desktop Underwriter (DU) loans. Freddie Mac made a similar move in 2022, after expanding its Loan Product Advisor framework to allow approvals for borrowers without a usable credit score, as long as the rest of their financial "big picture" is stable. You'll still have to demonstrate that you can pay your mortgage when you apply, but these changes are expected to have a profound impact on entry-level buyers.

For first-time buyers, these shifts in credit score requirements aren't just policy updates filed by paper pushers. They are game changers. Poor credit scores are one of the leading reasons mortgage loan applications are denied, according to data released from the U.S. Home Mortgage Disclosure Act (HMDA). By removing that obstacle, Fannie Mae and Freddie Mac programs can serve people who are stuck renting, living with family, or delaying homeownership not because they don't make enough income but because they have a short or imperfect credit history. Now, even borrowers with limited credit or past late payments have a clearer path to homeownership. Young adults, recent grads, gig-economy workers, and those who are rebuilding their credit will have a chance to compete for entry-level homes instead of watching prices soar even further out of reach while they wait for poor credit scores to improve.

It's good news if you're preparing to sell your house, too, especially if you're anxious to move out of your own starter home. When more buyers can qualify for those properties, existing homeowners are better positioned to sell and move up. Although this may put some competitive pressure on the affordability of starter homes, it's also possible the shift will create a meaningful ripple effect throughout the entire housing market. Opening the door to more potential home buyers may also encourage new construction aimed at first-time buyers. By shifting the focus from one rigid number to a real-world look at borrowers' actual financial capabilities, removing credit score loan qualification requirements can help rebuild a more accessible housing market for millions of Americans.