Fannie Mae has informed lenders that it will now require a minimum credit score for the loans it buys, according to a Reuters report. The move is in spite of lawmakers' recent pressure on both Fannie Mae and Freddie Mac to more aggressively buy loans in order to support the housing market and lower rates.
Fannie will require a minimum score of 580 for most loans, although it will still acquire loans with lower credit scores in certain situations, and will lengthen the required period for borrowers to re-establish credit history post-foreclosure from four years to five years.
At the same time, Fannie has also extended forbearances – allowing temporary suspensions or reduced payments by borrowers for up to six months, up from four months, the article adds.
‘In making individual eligibility decisions, our company works closely with lenders and other stakeholders in the housing finance system to make fair and equitable determinations based on the best available data,’ states Brian Faith, managing director of communications. ‘We are reaching out to the lending industry and housing advocates to explain these decisions and garner feedback, and we will continue to do so.’