🤔 Can You Really Get a Mortgage with No Credit Score in Virginia Beach? 🏡 Fannie Mae Says Yes (with Caveats!)

Hello Hampton Roads,

What Does It Mean That Fannie Mae Removed the Minimum Credit Score Requirement from DU?

If you’ve heard that Fannie Mae removed the minimum credit score requirement from Desktop Underwriter (DU), you might be wondering: “Wait—can buyers now qualify for a mortgage with no credit score?” The short answer is yes, but with important caveats. This change doesn’t mean credit scores are irrelevant—it means DU now evaluates borrowers using a broader, more inclusive set of criteria. For many renters and first-time buyers in Virginia Beach and Hampton Roads, this could open the door to  home ownership.

💡 What Is Desktop Underwriter (DU)? DU is Fannie Mae’s automated underwriting system used by lenders to assess whether a borrower qualifies for a conventional mortgage. It analyzes a borrower’s financial profile—including income, assets, debt, and credit history—and delivers a recommendation (like “Approve/Eligible” or “Refer with Caution”). DU helps lenders make faster, more consistent decisions while ensuring loans meet Fannie Mae’s guidelines.

🔑 Key Takeaways: What Fannie Mae’s DU Update Means for Virginia Beach Buyers

1️⃣ You Can Now Qualify Without a Credit Score—If DU Says Yes

Fannie Mae’s Desktop Underwriter (DU) no longer requires a minimum credit score, giving buyers with thin or no credit files a new path to approval.

2️⃣ DU Looks Beyond Credit Scores to Assess Risk

Instead of relying on a single number, DU now evaluates income, assets, payment history, reserves, and loan structure to determine eligibility.

3️⃣ Renters and First-Time Buyers Gain New Access

This change benefits credit-invisible buyers—especially renters, immigrants, and first-generation homeowners—who’ve been locked out of conventional financing.

4️⃣ Documentation Still Matters—Even Without a Score

DU requires full verification of income, assets, and payment history. Buyers should be ready to show rental records, bank statements, and employment details.

5️⃣ Lenders May Still Apply Overlays—So Shop Smart

While DU is more flexible, some lenders may still impose stricter rules. Understanding overlays and comparing lenders is key to maximizing this opportunity.

🧮 DU No Longer Requires a Minimum Credit Score

In a major shift toward inclusive lending, Fannie Mae’s Desktop Underwriter (DU) no longer requires a minimum credit score to assess loan eligibility. This change, effective November 2025, allows DU to evaluate borrowers using a broader set of financial indicators—making it possible for credit-invisible buyers to qualify for conventional loans.

✅ Here's What Changed

• No Minimum Score Required in DU: Borrowers can now be approved through DU even if they have no credit score at all. DU will analyze other financial factors to determine eligibility.

• Manual Underwriting Still Requires 620: This flexibility applies only to loans processed through DU. If a lender chooses manual underwriting, the traditional 620 minimum credit score still applies.

📍 Why It Matters in Virginia Beach

In markets like Virginia Beach and Hampton Roads—where many renters are cost-burdened and first-time buyers may lack traditional credit—this update could unlock access to homeownership for thousands. It’s especially relevant for:

• Renters with strong payment histories but no credit cards

• First-generation buyers navigating financial systems for the first time

• Households with limited U.S. credit history

By removing rigid score thresholds, DU opens the door for more nuanced, equitable lending decisions—without compromising loan quality.

🧩 What DU Considers When No Credit Score Is Available

DU analyzes a combination of verified financial factors to determine eligibility:

💰 Down Payment Amount (Loan-to-Value Ratio)

A larger down payment reduces risk and improves the likelihood of DU approval. For example, putting 10–20% down may offset the absence of a credit score.

🏠 Loan Type and Property Use

DU favors primary residence purchases over second homes or investment properties. Fixed-rate loans are generally viewed as lower risk than adjustable-rate mortgages.

📄 Verified Income and Employment

Stable, documented income is essential. DU looks for consistent employment history and income that supports the proposed mortgage payment.

🏦 Verified Assets and Reserves

DU evaluates savings, checking accounts, retirement funds, and other liquid assets. Having reserves (extra funds after closing) can strengthen the file.

📊 Debt-to-Income (DTI) Ratio

Even without a credit score, DU calculates DTI based on documented debts and income. Lower DTI ratios (typically under 43%) improve approval odds.

📅 Payment History on Alternative Tradelines

DU can consider rent, utilities, phone bills, and other recurring payments—especially if they’re documented through bank statements or third-party verification.

📍 Occupancy and Transaction Type

DU is more flexible for purchase transactions than cash-out refinances. Owner-occupied homes are viewed more favorably than non-owner-occupied ones.

In a city where many renters have strong payment histories but limited credit files, DU’s expanded criteria offer a new path to homeownership. Buyers who’ve consistently paid rent, saved for a down payment, and maintained stable employment now have a chance to qualify—even if they’ve never used a credit card.

🧠 Is This Truly a Game-Changer or a Nothing Burger?

The answer depends on how lenders respond and how well buyers are prepared. Let’s break it down

✅ Pros

• Expanded Access for Credit-Invisible Borrowers: DU now considers rent, utilities, and verified income—even if a borrower has no credit score. This is huge for renters, immigrants, and first-time buyers in Virginia Beach who’ve been financially responsible but excluded from traditional credit systems. It’s a direct response to the 26 million “credit invisible” Americans identified by the CFPB.

• More Inclusive Risk Assessment: Instead of relying on a single number, DU evaluates a borrower’s full financial picture: income, assets, reserves, loan type, and payment history. This multifactor approach rewards real-world financial behavior—not just credit card usage.

• Potential Boost in Homeownership Rates: In equity-focused Strategic Growth Areas (SGAs) like Newtown, Rosemont, and Burton Station, this change could help close the homeownership gap. Buyers who previously didn’t “score” now have a seat at the table—especially when paired with local attainable housing incentives.

⚠️ Cons and Caveats

• Not a Guaranteed Approval: No credit score doesn’t mean no risk. DU may still issue a “Refer with Caution” if other red flags exist—like high DTI, insufficient reserves, or inconsistent income. Buyers still need to show financial readiness.

• Lender Overlays Still Exist: Many lenders impose their own rules—like minimum scores, stricter DTI limits, or reserve requirements—even if DU doesn’t require them. These overlays vary by lender, so buyers should shop around and ask: “Do you follow DU’s no-score policy, or do you have overlays?”

• Manual Underwriting Still Requires 620: If DU doesn’t approve the file, fallback options like manual underwriting still require a 620 minimum score. So while DU opens a new door, it’s not the only path—and it’s not always wide open.

🧭 Bottom Line: It’s a Strategic Opportunity—Not a Shortcut

This isn’t a nothing burger—it’s a meaningful shift toward equity in lending. But it’s not a magic wand either. The real impact depends on:

• How lenders implement the change

• How well buyers document their financial story

• How real estate professionals educate and advocate

🆚 Fannie Mae vs FHA: Which Is Easier for First-Time Buyers?

For years, FHA loans have been the go-to option for first-time buyers—especially those with lower credit scores, limited savings, or non-traditional financial histories. But with Fannie Mae’s recent DU update removing the minimum credit score requirement, the playing field is shifting.

Let’s break down the pros, cons, and strategic fit for each option.

📊 Side-by-Side Comparison

Feature	Fannie Mae (DU)	FHA Loans
Minimum Credit Score	None (via DU)	580 (or lower with compensating factors)
Alternative Tradelines	Accepted (rent, utilities, etc.)	Accepted with documentation
Reserve Requirements	Varies by lender	Often more flexible
DTI Flexibility	Moderate	More forgiving
Manual Underwriting	Requires 620	Available with low scores

📚 Sources for Loan Guidelines: For official underwriting criteria and program details, refer to:

• Fannie Mae Selling Guide
• HUD Handbook 4000.1 (FHA Guidelines)

✅ When FHA Still Wins

• Lower Credit Scores (Below 620): FHA allows manual underwriting for scores as low as 580—or even lower with strong compensating factors like large reserves or low DTI.

• Smaller Down Payments: FHA requires just 3.5% down, and allows gift funds and down payment assistance more broadly.

• Flexible DTI Ratios: FHA often approves borrowers with DTI ratios above 50%, especially with automated underwriting.

For buyers with limited reserves, thin documentation, or credit blemishes, FHA remains a reliable and accessible option.

🚀 When Fannie Mae via DU Is a Game-Changer

• No Credit Score at All: DU now evaluates borrowers with no score using verified income, assets, rent history, and loan structure.

• Strong Documentation: Buyers with stable employment, consistent rent payments, and savings may qualify—even without traditional credit.

• Conventional Perks: Fannie Mae loans may offer lower mortgage insurance costs, faster processing, and more flexibility for future refinancing.

This is especially powerful for renters in throughout Hampton Roadss who’ve been financially responsible but locked out of conventional financing due to credit invisibility.

🧭 Strategic Verdict

FHA may still be easier for buyers with low scores and limited reserves. But for buyers with no score and strong documentation, Fannie Mae via DU is now a powerful alternative—especially if you’re shopping lenders who follow DU’s updated guidelines without overlays.

❓ Frequently Asked Questions: Fannie Mae’s DU No-Score Update

1. Can I really get a mortgage with no credit score now?

Yes—if your lender uses Fannie Mae’s Desktop Underwriter (DU). As of November 2025, DU no longer requires a minimum credit score. Instead, it evaluates your income, assets, rent history, and loan structure to determine eligibility. You’ll still need strong documentation, but a missing score is no longer a dealbreaker.

2. What does DU actually look at if I don’t have a credit score?

DU considers a range of verified financial factors, including:

• Your down payment and loan-to-value ratio

• Employment and income stability

• Bank account balances and reserves

• Rent and utility payment history

• Debt-to-income (DTI) ratio

• Whether the home is a primary residence

It’s a holistic review—not just a number.

3. Is this better than going with an FHA loan?

It depends on your situation. FHA is still a great option for buyers with low credit scores and limited savings. But if you have no score and strong documentation (like rent history and stable income), Fannie Mae via DU might offer lower mortgage insurance and more flexibility. The key is comparing both paths with a lender who understands the differences.

4. What’s a lender overlay, and why should I care?

A lender overlay is an extra rule a lender adds on top of DU’s guidelines—like requiring a minimum score even when DU doesn’t. Some lenders follow DU’s no-score policy, while others don’t. That’s why it’s important to ask: “Do you follow DU’s no-score approval, or do you have overlays?”

5. I’ve never used a credit card, but I’ve paid rent on time for years—do I have a shot?

Absolutely. If you’ve got a solid rent history, stable income, and can verify your assets, DU may approve you even without a credit score. This update is designed for buyers like you—especially renters in Virginia Beach who’ve been financially responsible but credit-invisible. The key is working with a lender who understands how to present your financial story to DU.

Got more questions? Liz Schuyler offers a free buyer consultation to talk about your home buying plans.

📝 Summary: DU’s No-Score Update Expands Access for Virginia Beach Buyers

Fannie Mae’s November 2025 update to Desktop Underwriter (DU) removes the minimum credit score requirement for automated underwriting. This change allows DU to evaluate borrowers with no credit score using verified income, assets, rent history, and loan structure. For credit-invisible buyers—especially renters, first-generation homeowners, and households with limited U.S. credit history—this opens a new path to conventional mortgage approval.

DU’s multifactor risk model considers down payment, DTI ratio, reserves, employment history, and alternative tradelines. While FHA loans remain a strong option for buyers with low scores and limited reserves, Fannie Mae via DU is now a powerful alternative for those with strong documentation and no score.

🎯 Conclusion: A New Path—If You’re Prepared

Fannie Mae’s DU update is a meaningful shift toward inclusive lending, especially for credit-invisible buyers in Virginia Beach. But it’s not automatic—success depends on strong documentation and working with lenders who follow DU’s no-score policy without overlays.

For buyers with no credit score but solid financials, this is a real opportunity to qualify for a conventional loan. The key is preparation, strategy, and choosing the right lending partner.

Bottom line: If you have no credit score but strong financial documentation, Fannie Mae via DU may be your most powerful path to homeownership in 2025.

🔓 No Credit Score? DU Says You Still Might Qualify

Fannie Mae’s Desktop Underwriter now evaluates borrowers with no credit score using verified income, assets, and rent history. If you’ve been renting responsibly but never used a credit card, this could be your moment to qualify for a conventional loan—without the traditional barriers. Let's talk about your home buying plans!

📅 Schedule Your First-Time Buyer Strategy Call

Thanks for Reading,

Back to Hampton Roads Real Estate Ramblings

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Liz Schuyler, Virginia Beach Real Estate Agent
RE/MAX Allegiance

Liz Schuyler is a top Virginia Beach REALTOR® with RE/MAX Allegiance, licensed since 2001 and trusted across Hampton Roads. With 350+ homes sold, she helps clients Sell, Move, and Invest with confidence and strategy.