News for those with no credit scores

Fannie Mae rolled out changes this month for those that do not have credit scores.  Prior to this update, borrowers with no credit score had to have their loan application manually underwritten and most investors would not accept these files. Now Fannie Mae has come up with an automated system to underwrite files with non-traditional credit.  So if you do not have a credit score, it may be possible to buy a home now.

The requirements for those without a credit score are:

-10% minimun down payment

-owner occupied homes only

-maximum debt to income ratios of 40% (meaning your house payment and any other debt can't be more than 40% of your gross income)

-maximum mortgage amount of $417,000

-purchase and rate/term refinances only

-you must have two non-traditional trade lines and one must be housing related (rent, etc)

If you meet these criteria, you may be able to qualify for a conventional mortgage to purchase a home. The biggest hurdle will probably be the down payment, but for some this may be the answer they have been waiting for. This does not mean that if you have several collections but no credit score that you will be able to get financed. This is for someone that does not have any credit or possibly just opened a tradeline and has no credit score.

For those without credit, it may be easier to establish some credit than it will be to save up the 10% down payment.  However, if you save money, this could be an alternative to getting into a new home.

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage & Equity Consultants, Inc, AnEqual Housing Lender, NMLS#150953 - Email - Website

Written By

Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

Related Posts

Down Payment Assistance

đź–¨ Print Article Are you thinking about buying your first home but not sure about your down payment? Do you have some money saved up but not sure it’s enough?...

Wednesdays Unplugged – Easy Oven Baked Rice

đź–¨ Print Article “Life is what we make it. Always has been, always will be.” – Grandma Moses NOTE: I spend my Wednesdays Unplugged from appointments. It’s my day to stay home,...

Subscribe to Our Newsletter for Market Updates & Mid-Century Modern Listings

Our weekly HomesMSP Update includes current local market information and a curated list of mid-century modern properties for sale, plus posts from an inspector, a lender, a stager, info about neighborhoods, life in the Twin Cities… even recipes!


Blog Categories


Sharon and John Hensrud

About Us

The HomesMSP Team is committed to meeting you where you are and listening… really listening to understand you so we can use our extensive knowledge of the market and local neighborhoods to give you personalized service.