Important Update for Homebuyers: Fannie Mae’s New Credit Rules Could Open More Doors in 2025

by Hybrid Real Estate

A Major Change for Oregon Homebuyers

Starting November 16, 2025, Fannie Mae will implement a major update to how conventional mortgage eligibility is determined through its Desktop Underwriter (DU) system — and it could make homeownership more accessible for many buyers in the Eugene area.

For years, buyers needed a minimum credit score of 620 to qualify for a conventional loan. That requirement is now going away. Instead, Fannie Mae’s DU will rely on a comprehensive risk assessment — evaluating your income, debt-to-income ratio, reserves, down payment, and credit behavior to determine eligibility.

This change aims to help more qualified buyers purchase homes without being held back by a single number.

What This Means for Eugene-Area Buyers

Here’s what to expect in the Eugene and Lane County housing market:

No minimum credit score barrier. Borrowers who might have previously been excluded due to limited or thin credit files may now qualify for conventional financing.
More inclusive lending models. Fannie Mae will now accept both FICO and VantageScore 4.0, giving lenders more flexibility in evaluating credit.
Holistic financial review. Desktop Underwriter will weigh your overall financial health rather than relying solely on your credit score.
Same affordability standards. Income, debt ratios, assets, and down payment requirements still apply — so responsible budgeting and preparation remain essential.

Tip from Hybrid Real Estate: If you were previously turned down for a conventional mortgage or had borderline credit, talk to your lender or a Hybrid Real Estate agent about rerunning your pre-approval after November 16. You might have more options than before.

Why It Matters in Eugene

With home prices and interest rates evolving, flexibility in lending standards can make a real difference. The Eugene market — from Friendly Street and South Hills to Springfield’s Thurston and Santa Clara — includes a wide range of price points. Expanded eligibility means more buyers can explore neighborhoods they love while maintaining a sustainable budget.

Hybrid Real Estate agents are already preparing for these changes and working closely with local lenders to ensure our clients are informed and ready when the update takes effect.

How to Prepare

Here are practical steps to take this fall if you plan to buy:

Review your credit reports now. Even though the score floor is gone, good credit habits still matter.
Get pre-approved (or re-approved). Ask your lender if their system uses the updated Fannie Mae DU model.
Set a realistic budget. Account for taxes, insurance, and maintenance — especially in areas like South Eugene or Coburg.
Work with a local agent. Hybrid Real Estate brokers understand micro-market pricing, schools, and commute zones better than national platforms.
Ask about Oregon assistance programs. Programs through Oregon Housing and Community Services (OHCS) can help with down payments or closing costs for qualifying buyers.

Quick FAQ

Q: When does the change take effect?
A: The update goes live November 16, 2025. New loan applications submitted through Desktop Underwriter after this date will follow the new rules.

Q: Does this apply to government loans (FHA, VA, USDA)?
A: No — those programs maintain their existing credit score requirements.

Q: Could this impact home prices?
A: Possibly, as more qualified buyers enter the market. Local supply and demand will still be the biggest factor.

Q: Should I wait until after the update to buy?
A: If you’re already pre-approved and ready, stay the course. But if you’re close to qualifying or have limited credit history, waiting until after November 16 might improve your options.

Summary

This Fannie Mae update is one of the most significant mortgage changes in years. By removing the 620 minimum credit score and adopting a broader risk model, more Eugene-area buyers can compete in the market — especially those with solid income and savings but limited credit history.

Hybrid Real Estate’s experienced agents and partner lenders are here to help you navigate these changes and make smart, confident decisions as you move toward homeownership.

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