The Death of 620: Buying a House With NO Credit Score (The "Secret" Update)

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For decades, the 620 credit score was the bouncer at the door of the housing market. If you didn’t have the number, you didn’t get in.

But Fannie Mae just changed the locks.

In this episode of the Lending Lounge, Cortavius Thomas breaks down the massive shift in Desktop Underwriter (DU) that is allowing "Credit Invisible" borrowers to bypass the credit score requirement entirely. We discuss exactly what the bank needs to see instead (the "Shadow Credit Report") and why having no score is now better than having a bad score.

Plus, we look at the "thaw" in the housing market as inventory finally cracks 1.1 million, and we issue a serious warning about UDM (Undisclosed Debt Monitoring)—the silent system lenders use to watch your spending until the moment you sign.

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Disclaimer: All lending advice is general. Guidelines change. Consult a licensed professional for your specific scenario.

Episode Transcript

Speaker (00:00):
For decades, the conventional mortgage market has
been a private club.
If you didn't have the magicnumber...you didn't get in.
But the bouncer has just quit.
And the VIP section is wideopen.
If you know the password.
Welcome to the Lending Lounge.

(00:28):
I'm Cortavius Thomas, and todaywe are tearing up the rule
book.
The banks have been gaslightingyou about credit scores and the
news has been lying to youabout housing inventory.
Let's get straight to the uglytruth First up on the cheat
sheet, something massive justhappened in the dark back rooms
of the mortgage world.
Fannie Mae, the granddaddy ofall mortgages, just updated

(00:51):
their brain.
It's called desktopunderwriter, and as of
mid-November 2025...They removedthe hard credit score
requirement.
Now, let's be accurate.
Here we are talking aboutconventional loans.
For years, six 20 was the covercharge and it didn't get you
the best interest rate, and itmight not have gotten you the
lowest down payment, but it didat least get you inside of the

(01:13):
building.
If you had a 619 the computersimply said, ineligible.
You were locked out ofconventional financing entirely.
But now Fannie Mae issaying...'We don't need a FICO
score to judge the risk.
this is a massive shift for thecredit invisible people, the
people who have cash, the peoplewho pay rent religiously, but

(01:33):
simply don't have enough tradelines to generate a score
Instead of a hard no.
The system now runs acomprehensive risk assessment.
It looks at the cash in thebank.
It looks at your down payment.
It looks at the data, and notjust the FICO, but.
Here is the trap.
Just because Fannie Maye removethe cover charge doesn't mean
your lender is letting you in.

(01:55):
We call these overlays.
Imagine Fannie Mae says, sure,let 'em in.
But the bank manager at thedoor says, nah, I don't like his
shoes.
That is an overlay.
So if a lender tells you nobecause of your score, you look
them in the eye and you ask, isthat a Fannie Mae saying no?
Or is that you saying no?
Make them answer that question.

(02:17):
Next up, the golden handcuffsare officially rusting off.
For two years we've beenhearing the same sob story.
I have a 3% interest rate.
I'm never moving.
I'll die in this house before Igive up this payment.
Well, guess what?
Life comes at you fastinventory just cracked 1.1

(02:38):
million listings.
Why?
Because you can't live in aninterest rate.
You live in a house and peopleare getting divorced, people are
having triplets, people aregetting transferred to Tulsa.
The lock-in effect is deadbecause life events don't care
about the Federal Reserve.
This is good news for you.
Why?
Because the power dynamic isshifting back to the middle.

(03:01):
Six months ago, you had towaive the inspection just to get
a call back.
You had to offer your firstbornchild to get the keys.
Now homes are sitting for 30days.
That means you can negotiaterepairs.
That means you can ask for moreclosing costs.
That means you can actuallythink about the house before you
buy it.
Don't let the headline scareyou.

(03:22):
More inventory means more powerfor the buyer, period.
Finally.
Let's talk about the elephantin the room.
Interest rates, we are sittingaround 6%, maybe a little
higher, maybe a dip into thehigh fives, and I see people in
comments every day crying.
I'm waiting for 2021 to comeback.

(03:42):
Stop it.
2021 was a unicorn.
It was a fever Dream it is notcoming back.
The Fed is likely cutting ratesagain in December, but that
doesn't mean we're going to 3%.
6% is the new normal.
Actually, 6% is historicallynormal.

(04:03):
We have to change the mindset.
Stop trying to date the rate.
That is a salesman's line.
I want you to marry the budgetif the monthly payment works for
your family.
If you can afford the house.
Buying at 6% and refinancinglater is a strategy Waiting for
a unicorn that doesn't existwhile home prices are going up.

(04:25):
That is not a strategy.
That is financial suicide.
The market has stabilized, theinventory is back, the credit
box is opening up.
The only thing stopping you nowis the bad advice that you're
getting from people who don'tknow the industry, but that's
why you're here.
now, speaking of bad advice, Iwant to show you exactly what

(04:45):
this no score approval lookslike on paper.
Because if you walk into a bankand just say, I have no score,
they will laugh at you.
You need to come prepared.
Let's head over to the board.
Alright, we established thatthe six 20 score wall has
crumbled for conventional loans,but do not celebrate yet.
Because what Fannie Mae putinto place is actually harder

(05:07):
for most people to navigate.
If you don't have a creditscore, you have to become your
own credit bureau.
Let's look at the difference.
The old way was.
Lazy.
The bank pulled a report.
The report said six 19.
The bank said no the new way.
It is a forensic audit of yourspending.

(05:28):
If you want this automatedapproval with no score, you need
to show a shadow credit report,and here's exactly what goes
into it.
first.
You need 12 months of housinghistory, and this is where the
cash economy hurts.
You sure your landlord can signa piece of paper saying that
you paid, but the new Fannie Maebrain wants to see the data

(05:50):
itself.
It wants to scan your bankaccount and see the rent leaving
every single month.
If you pay in cash or if youVenmo your cousin for rent
without a lease, you can make it10 times harder to get
approved.
The computer wants a digitalpaper trail.
It wants to see the withdrawalon the same day for the same

(06:12):
exact amount.
If you want the smooth road,stop paying in cash.
If you are paying your rent incash, you are invisible to the
bank.
Get it on the record Seconditem, we need non-traditional
trade lines.
The computer wants to see thatyou can pay something on time,
an electrical bill, cell phonebill, car insurance.

(06:34):
We usually need 12 months ofhistory for these and you are
going to have to do the legwork.
You might have to call theutility company and wait on hold
for an hour to get a paymenthistory letter.
This is the sweat equity of theno score loan.
You have to do the work thecredit bureaus usually do for
you.
And finally, the new heavyhitter, the cash flow

(06:57):
assessment.
Because you don't have a score,Fannie Mae is going to scan
your bank account to see how youmanage money.
They are gonna look forNSFs—non-sufficient funds if you
overdrew your account to buypizza last month.
The computer sees that as arisk factor.
If you have a credit score, youcan overdraft your account and
the mortgage lender might noteven see it.

(07:18):
But if you have no score, theoverdraft is a red flag.
It tells the system that youcan't manage your cash flow.
So here's the ugly truth.
Yes, you can get a loan withouta score, but you have to live
financially perfect for 12months.
Perfect rent, perfect bills,positive cash flow.

(07:39):
If you can do that, you areactually a better borrower than
the guy with a six 40 score whohas max status cards and missing
payments.
The system is finally smartenough to recognize that
cashflow matters more thannumbers.
Just make sure you have thedata to prove it Now let's take
a moment to check on the streetpulse.
I was on Reddit this morningand I was cruising through the

(08:02):
first time a home buyer page,and I found a post that made me
nervous.
Not because the borrower isirresponsible, but because they
don't understand thesurveillance state of modern
lending.
Here is the situation.
We have a user asking, why doeseveryone say don't use credit
cards before closing?
I use my credit card forpoints.

(08:22):
I pay it off every week.
I have a seven 80 credit score.
What is the issue?
look, logically you are right.
If you spend a thousand buckson an existing card and pay it
off, you have zero debt.
But mortgage underwriting isn'tbased on logic, it is based on
snapshots, and you are ignoringa little system we call UDM,

(08:44):
undisclosed debt monitoring.
Most borrowers think the lenderonly checks your credit score
twice.
Once at the start and once atthe end.
That is the old way.
Today, UDM is watching youcontinuously throughout the
transaction.
It is looking for newinquiries, but it is also
looking for balance spikes.
Here is the nightmare scenario.

(09:06):
You swipe your existing visafor $3,000 to buy furniture.
You plan to pay it off onFriday, but the UDM system takes
a snapshot on Wednesday.
It sees that your balancejumped from zero to $3,000.
It flags the file.
Now the underwriter has toassume the debt is real.
That $3,000 balance creates anew minimum monthly payment.

(09:27):
If your debt to income ratio istight, that extra payment could
technically disqualify you, buteven if you qualify, you just
created a paperwork nightmare.
The underwriter has to stop thefile.
They have to ask for creditsupplement, then they need
proof.
You paid it off.
They need the new statement andsuddenly you are delaying your
closing by 48 hours because youwanted $30 worth of airline

(09:50):
points.
It is not about whether you canpay it.
It is about whether you want todeal with the friction.
So here is the Street Pulseplaybook.
When you are under contract,especially in the final stretch,
put that plastic on ice.
Use your debit card, use cash.
Don't confuse the UDM system.
The bank is bureaucratic.

(10:11):
They move slow, and if youspike a balance, you are giving
them more reason to ask morequestions.
Don't trip over pennies to pickup dollars.
Freeze the credit cards untilyou have keys in hand.
You can earn points after youmove in.
All right, that's the show.
Let's recap what we learnedtoday.
First, Fannie Mae has changedthe game.

(10:34):
Six 20 credit score wall isgone for conventional loans.
But remember, you will need toprove your worth with data,
rent, utilities, cash flow,build that paper trail.
second, the market is thawing.
Inventory is up.
The lock-in effect is dying.
You have negotiating power.
Again, use it.
And third respect, the UDM BigBrother is watching your credit

(10:57):
card balances until the momentyou sign.
Be boring.
Boring, gets the keys,excitement, gets you a delay.
If you want the clips to sharewith your skeptical spouse or
friend, find us on TikTok andFacebook And hey, if your
current loan officer isn'ttelling you about these no score
options, or if they didn't warnyou about credit monitoring,
maybe it's time to find a newlounge.

(11:19):
I am Cortavius Thomas.
Remember, the bank has a planfor your money.
Make sure you have a betterone.
The lounge is closed.