Applications & Technology

Borrowers without credit scores

More homeownership opportunities

With recent enhancements in Desktop Underwriter® (DU®), consumers who apply for home loans where no borrower has a credit score will be better positioned to access credit, and lenders will benefit from a simplified underwriting process too.

Helping lenders qualify more borrowers with no credit score:

Updated eligibility criteria for loans where no borrower has a credit score now aligns with Fannie Mae’s standard Selling Guide requirements, which may help more borrowers qualify for a home loan.

Now permitted:

  1. One- to four-unit properties (including manufactured homes) up to standard LTV, CLTV, and HCLTV ratios, and
  2. Up to the standard maximum allowable debt-to-income ratio of 50%.
  • Data is gathered through a third-party asset verification report containing 12 months of data.
  • DU will assess or consider a borrower’s cash flow by reviewing transaction patterns, balance trends and other observations over time in their checking and savings accounts and investment accounts.

When an asset verification report is used by DU in the analysis of loans where no borrower has a credit score, the report may be used to satisfy the nontraditional credit source documentation requirements per the Selling Guide.

Propel your business with powerful capabilities and make the most of every lending opportunity. Click on an enhancement to learn more.

Take advantage in three easy steps

After you have ordered a credit report and verified that the borrower(s) on the loan application does not have a credit score, follow the steps below to enable DU to conduct a cash flow assessment:

 

3 speak

Step 1

Educate the borrower about the asset verification process, how it works, and obtain the appropriate borrower consent to order a report.

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Step 2

Order a report with 12-months of asset data from an authorized verification report supplier. Enter the Reference ID in DU.

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Step 3

Review the DU Underwriting Findings messages to see if the bank statement data has been considered.

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