The headlines sound dramatic.
“Fannie Mae removes the 620 minimum credit score!”
Cue excitement, panic, and a thousand half-baked TikToks.
Here’s the reality. This change matters, but not for the reasons most people think. And if you’re a buyer in Greater Boston, you need to read this before assuming the door just swung wide open.
1. The rule didn’t magically make low-credit borrowers “qualified”
Yes, Fannie Mae is removing the hard 620 cutoff from its automated underwriting system. That means a borrower with a score under 620 can now be evaluated instead of being auto-rejected.
Evaluated is not the same as approved.
The underwriting engine still looks at:
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Payment history
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Debt-to-income ratio
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Down payment and assets
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Job stability
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Recent negative credit events
A thin file or a messy history still gets a “no.”
2. Lenders can still say “sorry, not doing it.”
Fannie Mae sets minimum standards.
Lenders set overlays.
Many lenders maintain their own internal minimums because loans with low credit profiles entail higher risk, greater documentation requirements, and lower margins.
Translation: the rule change opens the door, but the lender can still keep it half-shut.
3. Rates and costs may offset the “benefit”
Lower credit profile.
Higher risk-based pricing.
Even if DU approves a borrower with a score below 620, the interest rate or required reserves might outweigh the benefits of approval. Buyers need to look at the full cost, not the headline.
4. FHA isn’t suddenly irrelevant
Some hot takes are already claiming “conventional loans will replace FHA.”
Not likely.
FHA still:
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Beats conventional pricing for many low-score borrowers
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Requires smaller down payments
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Allows higher debt ratios
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Has friendlier credit guidelines
For certain buyers, FHA will remain the better option.
5. The real winners are people with “thin credit,” not “bad credit.”
This rule helps two groups the most:
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People with limited credit history
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People with non-traditional credit activity (consistent rent, utilities, etc.)
The rule does not rescue borrowers with repeated late payments, collections, or recent delinquencies.
6. The biggest misconception: “This will make it easier to buy in Boston”
Removing a score requirement does nothing about:
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High prices
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Low inventory
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Competition
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Down payment requirements
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Cash reserve expectations
If anything, buyers entering the market with lower scores may encounter higher carrying costs, making owning less affordable.
7. So what’s the real takeaway?
This is an access change, not an affordability change.
It’s a nuance adjustment, not a free pass.
It allows more borrowers to be considered, but not more borrowers to be approved. And it absolutely does not lower the bar for credit quality, reserves, or financial stability.
Final thought
If you’re buying in Greater Boston in 2025, ignore the social-media hype and have an actual conversation with a lender who understands how to structure a strong file. The best loan is still the one you qualify for, can afford, and can comfortably carry.
If you want a quick walkthrough of how this rule might impact your specific situation, reach out, and I’ll connect you with a lender who will give you straight answers, not marketing headlines.