Fannie Mae Removes Minimum Credit Score in DU — What It Means for Kentucky Conventional Mortgages
Fannie Mae has removed the 620 minimum credit score requirement from Desktop Underwriter® (DU®) for new loan casefiles. Instead of a hard cutoff, DU now evaluates your full credit profile. For Kentucky first-time homebuyers, this may unlock access to a Kentucky conventional mortgage even if your score was previously “too low.”
Key Takeaways for Kentucky Homebuyers
No hard 620 floor
DU now runs a comprehensive risk assessment of your overall profile—income, debts, payment history, reserves, property, and purpose—not just your score.
Still full underwriting
“No minimum credit score required” doesn’t mean automatic approval. You must meet standard credit, income, asset, and property guidelines. Lenders may apply overlays.
Timing matters
This applies to new DU casefiles created on or after Nov. 16, 2025. Older files keep old rules. Coordinate submission with your loan officer.
Pricing still risk-based
Rates and mortgage insurance depend on your total profile. We’ll compare conventional vs. VA, USDA, and FHA—and whether KHC down payment assistance helps.
Who Stands to Benefit in Kentucky?
- First-time buyers with scores below 620 but strong income stability and on-time housing payments.
- Borrowers with limited credit depth who can document compensating factors (reserves, lower DTI, verified rent, reduced utilization).
- Clients comparing total cost of ownership across conventional vs. FHA/VA/USDA options.
Pro tip: Before running DU, clean up reporting errors, reduce revolving balances, and assemble documentation (W-2s/1099s, paystubs, bank statements, ID, and housing history). This strengthens DU’s overall assessment even without a score floor.
Conventional vs. FHA, VA, USDA in Kentucky
Conventional (Fannie Mae)
Now no minimum credit score required in DU for new casefiles. Best fit when overall profile is strong and mortgage insurance costs are competitive.
FHA
Often lower down payment and flexible credit, but includes mortgage insurance. Useful if pricing beats conventional for your profile.
VA & USDA
VA for eligible Veterans/Service Members—often no down payment. USDA offers zero down in eligible areas with income limits.
Action Plan for Kentucky First-Time Homebuyers
- Free pre-check: Share your basic info and goals. We’ll map the best path: conventional vs FHA/VA/USDA + KHC.
- DU scenario runs: We’ll run DU with the new rules and compare pricing and MI.
- Documentation: Gather ID, income, assets, and housing history so we can move quickly to full approval.
Ready to see if a Kentucky conventional mortgage works for you—without a minimum credit score requirement in DU?
Call/Text 502-905-3708 • Email kentuckyloan@gmail.com • Office: 911 Barret Ave, Louisville, KY 40204
FAQs: No Minimum Credit Score Required in DU
- Does this mean scores don’t matter anymore?
- No. Scores still influence risk and pricing. DU simply removed the hard 620 gate for new casefiles—your full profile drives the decision.
- Will my lender still require a certain score?
- Some lenders impose overlays (internal minimums). We’ll shop your scenario with investors aligned to Fannie Mae’s update.
- Can KHC down payment assistance pair with conventional?
- Yes—if you meet program rules. We regularly compare KHC DPA with conventional, FHA, VA, and USDA options to find the best total cost.
- When does this apply?
- For loan casefiles created in DU on or after Nov. 16, 2025. If your file predates this, we can recreate the casefile under the new rules where appropriate.
