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NO MINIMUM CREDIT SCORES
Fannie Mae will remove its long-standing 620 minimum credit score requirement starting November 16th. This shift is meant to expand access to borrowers with limited or non-traditional credit histories. Instead of relying on credit scores, lenders will assess overall risk using factors like rent, utility, and phone-payment history through alternatives such as VantageScore. The goal is to qualify strong borrowers who may appear “risky” due to thin credit files.
ALTERNATIVE CREDIT EVALUATION
Without a hard credit score cutoff, lenders will evaluate risk using more granular data. Payment history on rent, utilities, and recurring bills can now support a borrower’s eligibility. This helps long-term responsible payers who’ve never built traditional credit but have demonstrated financial reliability. Lenders emphasize that underwriting standards remain strict. This simply opens the door to borrowers who’ve been overlooked due to limited credit history rather than poor credit behavior.
MORTGAGE PORTABILITY (PORTING)
A newly discussed idea would allow homeowners to transfer their existing mortgage (and interest rate) to a new property. For example, a 3% loan on a current home could be carried over to a more expensive home, with the borrower taking out an additional loan only for the difference. This could unlock frozen inventory by encouraging owners with low fixed rates to move again. Existing homeowners benefit the most, while first-time buyers could see more listings hit the market.
THE PROBLEM FOR LENDERS
Portable mortgages fundamentally break the banking model. Banks and investors assume loans will be paid off roughly every 12–13 years when owners move. That early payoff helps recycle capital and avoid decades of holding low-yield loans. Allowing mortgages to follow borrowers would trap lenders into decades-long low-rate obligations, potentially recreating the same balance-sheet pressure that helped sink Silicon Valley Bank. To compensate, lenders would likely raise rates on new loans or require government subsidies.
THE REAL FIX: MORE HOUSING SUPPLY
All current policy changes, whether expanding loan limits, removing credit score floors, or proposing mortgage portability, attempt to tackle affordability from the demand side. But the core problem remains supply. Without zoning reform and increased building, affordability will continue to worsen. Long term, expanding construction – NOT reshuffling loan structures – is the only durable solution.
Otherwise, I hope you like living with roommates.
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What's next, 20 year car loans?
What about people who buy houses to flip them or rent them they out bid the first time him buyer ?
Wouldn't no minimum mean that people could be locked in at much higher rates? That seems predatory to me…
Horrible idea
I could see this going bad for a lot of people. Like a lot. But at the same time, people like myself who have just never used credit and therefore never accumulated a silly amount of debt, I don't have a good credit score. But my bills are paid on time and I'm responsible with money. I don't want a 50 year mortgage. But if I'm gonna have to either pay rent or pay a mortgage all the way until I die, which will be sooner than 50 years….
The next big short…
Is there something we can implement for the low income that isnt section 8 and doesnt line the pockets of the more fortunate? Without ONLY helping the poor or lower class we continue to increase the gap of wealth inequality. History shows that this leads to corruption and power differences that INEVITABLY lead to revolutions. We are going to have the poor eat the rich eventually. Maybe its always a fact of life but it doesnt mean we need to run to it.
Trump will do anything to bump a number that he can brag about bc right now he has failed on every measurable parameter. He will not care what it does to the rest of the future markets. He is found is most successful con of his entire life.
Ban renting and their be more home owners
We already heading to a housing crash ..look at the 40s and younger generations…how many can afford homes as the older passes.