On November 5, Fannie Mae announced updates to its Selling Guide, including the removal of minimum credit score requirements for loans underwritten through its automated system —“Desktop Underwriter” (DU) — effective for loan files created on or after November 16. Previously, DU required a minimum credit score of 620 for one borrower, or an average median score of 620 for multiple borrowers. Under the new policy, DU will rely on an internal “comprehensive analysis of risk factors” to determine loan eligibility, regardless of credit score.
The update also expanded “Day 1 Certainty” coverage, granting lenders relief from enforcement of representations and warranties for certain undisclosed non-mortgage liabilities identified after closing, effective on or after the weekend of November 15, provided all conditions outlined in the Selling Guide are met. Other changes to the guide, including expanded eligibility for age-of-credit documents on single-closing construction-to-permanent loans and new “eMortgage” eligibility for loans held in “inter vivos” revocable trusts, took effect immediately as of the release of the updated guide.
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