What the Recent Fannie Mae Credit-Score Change Means for Missoula Homebuyers- Is It Really Real?

If you’ve been told you “can’t buy a home” because of your credit score, here’s some good news, and a few caveats.

On November 16, 2025, Fannie Mae officially removes the 620-credit-score minimum for loans run through its Desktop Underwriter (DU) system. But does that really mean “anyone can buy”? Let’s break it down for Missoula homebuyers so you can plan confidently.

1. What Exactly Changed

Until now, many conventional loans required a minimum 620 credit score to qualify for purchase by Fannie Mae.
Beginning November 16, 2025:

• The DU system will no longer enforce that 620 floor.

• Instead, it evaluates a borrower’s entire risk profile: income, debt, reserves, property type, etc.

• Lenders still must obtain credit scores, but they can now approve loans that DU finds “acceptable” even if scores fall below 620.

⚠️ Reality check: This isn’t “no-credit-score loans.” Lenders, investors, and mortgage insurers may still require their own minimums.

2. Why It Matters for Missoula Buyers

Missoula’s housing market has shifted:

• Median sale price ≈ $532,00 | -8.2% (MLS, November 2025)

• Average home value ≈ $560,000 (Zillow, mid-2025)

• Mortgage rates are hovering near 6.1 % for a 30-year fixed (NerdWallet, 2025)

For buyers who’ve worked hard to rebuild credit, this change may be the opening you need. Fewer bidding wars and slightly longer days on market, about 65 days county-wide mean sellers are listening. Pair that with new underwriting flexibility, and qualified Missoula buyers could finally step in where they once couldn’t.

3. What Still Matters (and What to Watch Out For)

• Lender overlays: Some lenders will keep internal score minimums; ask before applying.

• Pricing: Lower scores often mean higher rates or PMI.

• Timing: The change applies to loan casefiles on or after Nov 16, 2025.

• Property condition & reserves: Still crucial. Homes in certain Missoula neighborhoods may require stronger borrower profiles.

• Inventory leverage: Median list price ≈ $607 K (-6.4 % YoY), giving buyers more room to negotiate, but only if you’re fully pre-approved.

4. Action Steps to Prepare in Missoula

1. Get Pre-Qualified Now
Choose a lender already updating to the new Fannie Mae rules. Ask: “What’s your minimum score for conventional loans under the new policy?”

2. Check and Clean Up Credit Reports
Pull from all three bureaus, dispute errors, pay down balances, and avoid new credit inquiries before applying.

3. Strengthen Other Factors
Lower your DTI, stabilize employment, and build reserves; each helps offset weaker credit.

4. Target the Right Price Band
Homes below $600 K in Missoula currently see less competition and can appraise more easily.

5. Use a Local Expert
Work with an agent who knows which lenders are adopting the change early (that’s me 😉).

6. Act Before Year-End
Rates remain steady, sellers are motivated, and this policy shift widens the window: don’t wait for next year’s buyers to catch on.

5. Ready to Buy Before Year-End?

With interest rates holding and new underwriting flexibility, now could be the best time in years to get positioned.

“Plan today, tour tomorrow, and close confidently before the new year.”

 

Conclusion

Yes, the Fannie Mae “no minimum credit-score” update is real. But it’s not a free pass. The buyers who prepare now by cleaning up credit, strengthening finances, and working with a proactive local team will benefit most.

Let’s talk about your path to homeownership in Missoula.
👉 Contact me to get your free Buyer’s Guide download and schedule a no-pressure strategy call.