Fannie Mae, officially known as the Federal National Mortgage Association, is a large government-controlled company that plays a significant role in the mortgage market. It operates by purchasing a substantial percentage of mortgages in the United States, providing liquidity to the housing market and enabling more affordable homeownership. When it comes to credit score requirements for loans purchased by Fannie Mae, here are the key points:

Guidelines for Selling Mortgages to Fannie Mae:

• Lenders who want to sell the mortgages they originate to Fannie Mae must adhere to Fannie Mae’s guidelines and criteria. These guidelines cover various aspects of mortgage lending, including credit score requirements.

Use of Classic FICO Credit Score:

• Fannie Mae requires lenders to use the classic FICO credit score models to assess a borrower’s creditworthiness. These models include:
  • Equifax Beacon 5.0
  • Experian/Fair Isaac Risk Model V2SM
  • TransUnion FICO Risk Score
  • Classic 04

Credit Score Requirements (As of 2022):

• As of 2022, Fannie Mae sets specific minimum credit score requirements for different types of mortgages:
  • For fixed-rate mortgages, the minimum required credit score is typically 620.
  • For adjustable-rate mortgages, a slightly higher credit score of 640 is generally required.

Lender Discretion:

• It’s important to note that while Fannie Mae sets these minimum credit score standards, individual lenders may have their own requirements. Lenders could ask for higher credit scores or have additional criteria that borrowers must meet.

In summary, Fannie Mae is a key player in the mortgage industry, and it sets credit score requirements for loans that lenders intend to sell to Fannie Mae. These requirements typically involve the use of classic FICO credit scores and vary depending on the type of mortgage. While Fannie Mae sets minimum standards, lenders may have their own credit score requirements that borrowers must meet to qualify for a mortgage.