May 16, 2024

San Diego home
San Diego home

Fannie Mae has increased the minimum borrower credit score from 580 to 620.

Brian Faith, a spokesperson at Fannie, confirmed the minimum hike, adding that the adjustment reflects a careful analysis of borrowers  ability to repay their mortgage obligations over the life of the loan.   Our experience with recently delivered loans with credit scores below 620 is that they reached a level of serious delinquency at a rate approximately nine times higher than other acquisitions during the same period,  Faith said in a statement.  Fannie also reduced the allowable debt-to-income (DTI) ratio to 45% when executing loss mitigation efforts under the Home Affordable Modification Program (HAMP). Under HAMP, the US Treasury Department provides allocated capped incentives to servicers for the modification of loans on the verge of foreclosure.   Faith said that high DTI ratio loans also have higher levels of serious delinquency.   It s not enough to help borrowers buy a home, we must also ensure that they can stay in the home over the long term,  Faith said

Sharing is caring!

2 thoughts on “Fannie Mae Hikes Mortgage Credit Scores

Comments are closed.