Can You Buy a House Without Credit in the United States? What You Should Know After Fannie Mae’s Recent Change

For years, buyers were told that without a high credit score, qualifying for a mortgage in the United States would be nearly impossible.
Today, that rule has changed — and it’s important to understand what it means.

As of November 16, 2025, the minimum credit score requirement for a conventional mortgage is no longer mandatory. Previously, a minimum score of 620 was required.

Fannie Mae, one of the institutions that sets the standards for how mortgages are approved, updated its guidelines and removed the minimum credit score requirement for loan approval.

This means their automated evaluation system (Desktop Underwriter, or DU) will no longer automatically deny applications solely due to a low score. Lenders will now rely on a more holistic review of the borrower’s financial profile.

This is an unprecedented change. From now on, people with scores below 620 may still have a chance to qualify for traditional mortgages if the rest of their financial situation supports it. DU will now assess risk more comprehensively, considering multiple factors in the borrower’s profile.

Is It Possible to Buy a Home With No Credit History?

Every year, more people wonder whether it’s truly possible to buy a home in the U.S. without credit. For many immigrants, self-employed workers, or individuals who are just starting their financial journey, building credit before buying a home felt like a long and difficult process.

Bill Pulte, Director of the Federal Housing Finance Agency (FHFA), explained that the change seeks to modernize how risk is measured and “give more families a fair opportunity without compromising financial stability.”

So the short answer is: yes.
If a borrower has no traditional credit history, DU will instruct lenders to use alternative documentation or homebuyer education instead of relying solely on a score.

To be clear, this doesn’t mean that every person with bad credit or no score will automatically get approved. Lenders will still evaluate several factors during prequalification.

If you already have credit and want to improve it, we also have a guide to help you strengthen your credit.

Going back to the main topic: you might be wondering whether buying a house without credit is a good idea.
By the end of this article, you’ll have a clear understanding of what buying without credit really looks like, what options you have, and whether it’s realistic for your financial situation.

What Does It Really Mean to Buy a Home Without Credit?

Buying a home without credit means purchasing a property without a traditional credit score recorded with agencies such as Experian, Equifax, or TransUnion.

According to the Consumer Financial Protection Bureau (CFPB), around 26 million adults in the U.S. are “credit invisible,” meaning they have too little credit information to generate a traditional score. This group makes up a significant part of buyers who rely on alternative credit.

Many people do not have a credit score because they:

• Have never used credit cards
• Pay everything in cash
• Are new to the country
• Have never applied for loans

Advantages of Buying a Home Without Credit

• Faster access to homeownership You don’t need to spend years building a high credit score first.
• Build your own equity Instead of renting, you start building wealth through homeownership.
• Real options for immigrants Many immigrants can buy a home using an ITIN and alternative documentation, depending on the lender.

Risks and Drawbacks You Should Consider

• Higher interest rates
  With no credit history, the lender assumes greater risk—often resulting in higher interest rates.
• Higher down payment
  Many lenders ask for 10% to 20% down to offset the lack of credit.
• Fewer lender options
  Not all banks offer this type of financing.

Conventional Loans Backed by Fannie Mae

It’s important to note that Fannie Mae is not a bank and does not lend money directly to consumers.
Its role is to back conventional mortgages and set the guidelines lenders must follow.

With the change that took effect on November 16, 2025, conventional loans backed by Fannie Mae no longer require a minimum score such as the previous 620 requirement.

This means:

• DU no longer auto-rejects applications for not meeting a minimum score
• Borrowers with low or no traditional score can still be evaluated if their financial profile is strong
• Approval depends on a full risk assessment, not just a single number

This applies to conventional loans evaluated through DU, opening the door for buyers who previously could not qualify.

HomeReady® (Fannie Mae Program)

Among conventional loans backed by Fannie Mae, HomeReady® stands out for buyers with limited credit or low to moderate income.

This program:

• Allows down payments as low as 3%
• Is designed for first-time homebuyers
• May accept alternative credit in certain cases
• Directly benefits from the new no-minimum-score evaluation model

HomeReady® has become one of the most practical options for buyers without a strong traditional credit history.

Why Freddie Mac Also Matters in This 

Freddie Mac is also a key player in the U.S. mortgage system. It is a government-sponsored enterprise created to give lenders liquidity and stability by purchasing mortgages (the secondary market) and selling them to investors.

Just like Fannie Mae, Freddie Mac also removed the minimum credit score requirement from its guidelines for conventional loans.

Home Possible® (Freddie Mac Program)

Freddie Mac’s Home Possible® program helps low- to moderate-income buyers qualify for a mortgage. It offers several benefits to make homeownership more accessible.

This program offers:

• Low down payment options
• Favorable loan-to-value (LTV) requirements
• Flexible down payment sources
• Manual underwriting options
• Lower fees and less stringent credit requirement

Who Qualifies Best to Buy a Home Without Credit?

Those with the highest approval success tend to have:

• Stable employment for at least 2 years
• Verifiable income
• Savings for the down payment and closing costs

• A responsible payment history (rent, utilities, etc.)

This shows lenders a pattern of financial reliability even without a score.

Recommendations Before Buying a Home Without Credit

• Organize your documentation
  Keep proof of rent, utilities, bank statements, etc.

• Save for your down payment
  The higher your contribution, the better terms you can negotiate.

• Avoid unnecessary debt
  Keep your debt levels low to strengthen your profile.

• Consult a mortgage expert

Is It Really Worth Buying a Home Without Credit?

The answer depends on your personal and financial situation.

For some, buying a home before building a high credit score is an opportunity to enter the market sooner and start building equity.
For others, it may be wiser to build a basic credit score first to access better interest rates and more affordable payments.

From my perspective, the goal is to buy a home when you can truly afford it — not at any cost.
Homeownership should provide stability, not financial stress.

Conclusion

Today, buying a home without a credit score is more achievable than ever. With the elimination of the minimum score requirement for Fannie Mae loans, the focus shifted from a number to a full financial profile.

Still, the process requires preparation, documentation, and a clear understanding of your options. The right path depends on your payment capacity and long-term goals.

Having guidance from a real estate professional can help you avoid mistakes, organize your plan, and present a strong case to your lender.

If you’re in Massachusetts, I’d be happy to offer you a free consultation to give you accurate answers based on your situation. I’d love to help you explore your options and move closer to your goal of owning a home in the United States. Click here to book your free consultation.