A major update just hit the mortgage world—and it’s going to reshape access to homeownership and investment purchases in 2025 and beyond. According to a recent Newsweek report on Fannie Mae’s policy overhaul, the long-standing 620 minimum credit score requirement for conventional loans is officially being eliminated starting November 2025.
Here’s what this means for buyers and investors:
• No more 620 credit-score minimum — Risk will now be evaluated through a broader set of credit factors instead of one hard cutoff.
• The 720 minimum for investor and second-home loans is also gone — especially impactful for buyers with 7–10 financed properties.
• More approvals at the margins — Buyers who were previously rejected by a few points may now get approved.
• Big win for investors — Many investors carry slightly lower credit scores due to multiple mortgages.
• Expanded access for everyday buyers — Borrowers previously shut out over minor score differences now have a real opportunity.
What This Means in Plain Terms
For years, if your credit score was under 620, you were automatically denied a conventional loan—end of story. Now, lenders can look at your entire financial picture instead of one number. Strong income, savings, rent payment history, and overall financial stability now matter more than ever.
Think of it as moving from a simple “pass/fail” system to a more balanced, holistic review.
A Real-Life Example
A buyer with:
• a 610 credit score
• stable income
• a solid down payment
• years of on-time rent payments
would have been automatically denied under the old system.
Under the new rules, that same buyer may now be approved because the lender can consider all of their strengths—not just their credit score.
This change also opens the door for investors who often carry slightly lower scores due to multiple mortgages.
What This Means Heading Into 2026—and the Spring Market
This policy shift continues into 2026, making it especially impactful for buyers entering the Spring Market, the busiest season of the year. Spring consistently brings the highest surge in inventory across the region, creating more options and more competition.
With these new credit rules fully in place:
• More buyers will qualify as inventory climbs.
• Boston-area sellers will benefit from a larger pool of approved buyers.
• First-time buyers who were just below the old credit cutoff now have a real chance to compete during the most active season.
• Investors can step into the market with more flexibility, especially in high-demand neighborhoods like Back Bay, South End, Cambridge, Brookline, and beyond.
These changes are a clear win for anyone planning to buy or sell in 2026.
If you’re thinking about buying, selling, or investing—and want to talk through how these updates impact your strategy—We are always here to help.
