You Can Now Qualify for Conventional with Less Than 620
As of November 16, 2025
✅ Fannie Mae removed the 620 minimum
✅ Freddie Mac already did this years ago
✅ Opens doors for thin credit profiles
🏠 Especially helpful for younger buyers and renters Happened last month. Good renters with thin credit can finally get in.
What Changed (November 16, 2025)
The old way:
Credit score below 620? → Automatic rejection from Desktop Underwriter
The new way:
No hard floor → System evaluates your complete credit profile Desktop Underwriter used to auto-reject. Now actually reviews your full file.
What they're looking at now:
📊 Payment history depth
💰 Income stability
💳 Credit mix and utilization
📈 Trended credit data (your credit behavior over time)
🏦 Cash reserves Trended data shows if you pay down balances or ride minimums. Aligns with FICO 10 and VantageScore 4.0 shift.
This Is NOT A Free-For-All
Let's be clear about what this change is NOT:
❌ Not a pass for bad credit
❌ Not "no credit check"
❌ Not loose underwriting
❌ Not a guarantee you'll get approved Social media is overselling this. Underwriting just as strict. Just not auto-rejecting on score alone.
This DOES help:
👶 Young buyers with thin files
🏢 Renters with consistent payment history but little revolving credit
📱 People who pay everything on time but don't use credit cards much
💼 Stable income, low debt, just not much credit history Bad credit? Doesn't fix that. Thin credit? This is your opening.
The Bigger Picture: How They're Really Looking At You
Moving from score-only to holistic assessment
Old System | New System |
Credit score: 615 | Credit score: 615 |
❌ Rejected immediately | ✅ Continue to full review |
- | • 3 years rent history, always on time |
- | • $75K income, DTI 28% |
- | • $20K in reserves |
- | • Only 2 credit cards, both paid off monthly |
- | Possible approval |
Low-risk person rejected purely on score. That's who this helps.
Trended credit data:
Instead of just seeing you have a $5,000 balance, they see:
📉 You've paid it down from $8,000 → shows responsibility
📈 You only charge what you can pay off → shows control
🔄 You're not riding minimum payments → shows you're not stretched Why industry's shifting to FICO 10/VantageScore 4.0. Uses 24+ months, not snapshot. Better risk predictor.
But Wait-Should You Even Use Conventional?
Just because you CAN qualify doesn't mean you SHOULD
If your score is below 620, FHA is probably still your better option:
FHA | Conventional (sub-620) | |
Minimum score | 580 for 3.5% down | No minimum, but... |
Interest rate | Lower rates for lower scores | Significant hits for sub-620 |
Mortgage insurance | 1.75% upfront + 0.55% annual (typical) | Much higher PMI for sub-620 |
Underwriting | More forgiving on credit events | Stricter compensating factors needed |
Down payment | 3.5% | 3-5% |
Pricing at 610 will hurt bad. FHA designed for this - better terms.
When conventional sub-620 might make sense:
💰 You have significant down payment (15-20%+)
🏠 Buying a condo that's not FHA-approved
📊 Very strong compensating factors (high income, low DTI, reserves)
🎯 Credit score is trending up fast and you'll refinance soon Edge cases. Most 580-620 buyers? FHA still wins. Don't let excitement cost you thousands.
The Lender Overlay Reality Check
Fannie and Freddie removed the requirement
BUT your lender might not have
🏦 Many lenders still have internal minimums (overlays)
📋 Common lender overlays: 620, 640, or even 660 minimum
💼 Each lender sets their own risk tolerance Frustrating part: Fannie says okay doesn't mean your bank will. Lenders more restrictive than agencies.
What this means:
🔍 You may need to shop around for a lender willing to go below 620
📞 Ask directly: "Do you have credit score overlays?"
⚖️ Expect stricter terms even if you find one (higher rates, more documentation) Sub-620? Find LO who knows which lenders actually do this. Most won't. Some will for strong thin-credit files.
What This Means For You
If you're 580-620:
Start with FHA - it's still designed for you and will likely save you money
If you're thin credit (limited history, not bad credit):
🎯 This change opens a new path to conventional
📞 Talk to a lender about your complete profile
📈 Keep building that credit while you shop
If you have actual bad credit (lates, collections, etc.):
⏸️ This doesn't really help you yet - focus on repair first
Bottom line:
This is good news for accessibility, but it's not a magic wand. You still need a strong overall profile. And for most first-time buyers with lower scores, FHA remains your best option. Balanced truth: progress, not revolutionary. Most still FHA first. Thin credit + strong finances? Your opening.