Fannie Mae has updated the credit score used by DU in its eligibility assessment to support
homeownership opportunities for more underserved borrowers. DU will no longer use the lowest of
the middle credit score to confirm mortgage loans comply with Fannie Mae’s minimum credit score
requirement of 620. DU may offer eligibility of these loan casefiles with the use of an average
median credit score.
How does this update in DU benefit my borrowers? Do they have to meet a 620 credit score?
Pickup: An increase may be seen in DU with “Approve/Eligible” recommendations based on average
calculation of all borrower’s middle scores. This scoring method will be used behind the scenes in
DU for credit eligibility purposes only. Please refer to Fannie Mae guidelines in the following KO
topics: Credit Scores and AUS Risk Analysis.
Examples:
DU Casefiles:
Number of Borrowers on the Loan Application
Step 1: Determine each borrower's median score
Step 2: Average the median scores to determine casefile score
Scores: 590, 605, 648 / Median: 605
Scores: 590, 605, 648 / Median: 605
Scores: 661, 693, 693 / Median: 693
Average: Not applicable
DU Representative Credit Score: 605 Average: (605 + 693) / 2 = 649
DU Representative Credit Score = 605
Pricing: The average median score will not be used for pricing. Pricing will continue to be based
on the Representative Credit Score. When the Representative Credit Score falls below 620 due to DU
using the average median score for qualifying, pricing will be dropped a tier to price below
620. OB has been updated with the changes required to allow for a less than 620 Representative
Credit Score; manual locking process is not required.
