Lending Lounge

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

• Cortavius Thomas

Share episode

Send us a text

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.

Connect with the Lounge:

  • Follow on TikTok & Facebook for clips and charts.

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

Speaker:

For decades, the conventional mortgage market has been a private club. If you didn't have the magic number...you didn't get in. But the bouncer has just quit. And the VIP section is wide open. If you know the password. Welcome to the Lending Lounge. I'm Cortavius Thomas, and today we are tearing up the rule book. The banks have been gaslighting you about credit scores and the news has been lying to you about housing inventory. Let's get straight to the ugly truth First up on the cheat sheet, something massive just happened in the dark back rooms of the mortgage world. Fannie Mae, the granddaddy of all mortgages, just updated their brain. It's called desktop underwriter, and as of mid-November 2025...They removed the hard credit score requirement. Now, let's be accurate. Here we are talking about conventional loans. For years, six 20 was the cover charge and it didn't get you the best interest rate, and it might not have gotten you the lowest down payment, but it did at least get you inside of the building. If you had a 619 the computer simply said, ineligible. You were locked out of conventional financing entirely. But now Fannie Mae is saying...'We don't need a FICO score to judge the risk. this is a massive shift for the credit invisible people, the people who have cash, the people who pay rent religiously, but simply don't have enough trade lines to generate a score Instead of a hard no. The system now runs a comprehensive risk assessment. It looks at the cash in the bank. It looks at your down payment. It looks at the data, and not just the FICO, but. Here is the trap. Just because Fannie Maye remove the cover charge doesn't mean your lender is letting you in. We call these overlays. Imagine Fannie Mae says, sure, let 'em in. But the bank manager at the door says, nah, I don't like his shoes. That is an overlay. So if a lender tells you no because of your score, you look them in the eye and you ask, is that a Fannie Mae saying no? Or is that you saying no? Make them answer that question. Next up, the golden handcuffs are officially rusting off. For two years we've been hearing the same sob story. I have a 3% interest rate. I'm never moving. I'll die in this house before I give up this payment. Well, guess what? Life comes at you fast inventory just cracked 1.1 million listings. Why? Because you can't live in an interest rate. You live in a house and people are getting divorced, people are having triplets, people are getting transferred to Tulsa. The lock-in effect is dead because life events don't care about the Federal Reserve. This is good news for you. Why? Because the power dynamic is shifting back to the middle. Six months ago, you had to waive the inspection just to get a call back. You had to offer your firstborn child to get the keys. Now homes are sitting for 30 days. That means you can negotiate repairs. That means you can ask for more closing costs. That means you can actually think about the house before you buy it. Don't let the headline scare you. More inventory means more power for the buyer, period. Finally. Let's talk about the elephant in the room. Interest rates, we are sitting around 6%, maybe a little higher, maybe a dip into the high fives, and I see people in comments every day crying. I'm waiting for 2021 to come back. Stop it. 2021 was a unicorn. It was a fever Dream it is not coming back. The Fed is likely cutting rates again in December, but that doesn't mean we're going to 3%. 6% is the new normal. Actually, 6% is historically normal. We have to change the mindset. Stop trying to date the rate. That is a salesman's line. I want you to marry the budget if the monthly payment works for your family. If you can afford the house. Buying at 6% and refinancing later is a strategy Waiting for a unicorn that doesn't exist while home prices are going up. That is not a strategy. That is financial suicide. The market has stabilized, the inventory is back, the credit box is opening up. The only thing stopping you now is the bad advice that you're getting from people who don't know the industry, but that's why you're here. now, speaking of bad advice, I want to show you exactly what this no score approval looks like on paper. Because if you walk into a bank and 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 that the six 20 score wall has crumbled for conventional loans, but do not celebrate yet. Because what Fannie Mae put into place is actually harder for most people to navigate. If you don't have a credit score, 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 your spending. If you want this automated approval 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 housing history, and this is where the cash economy hurts. You sure your landlord can sign a piece of paper saying that you paid, but the new Fannie Mae brain wants to see the data itself. It wants to scan your bank account and see the rent leaving every single month. If you pay in cash or if you Venmo your cousin for rent without a lease, you can make it 10 times harder to get approved. The computer wants a digital paper trail. It wants to see the withdrawal on the same day for the same exact amount. If you want the smooth road, stop paying in cash. If you are paying your rent in cash, you are invisible to the bank. Get it on the record Second item, we need non-traditional trade lines. The computer wants to see that you can pay something on time, an electrical bill, cell phone bill, car insurance. We usually need 12 months of history for these and you are going to have to do the legwork. You might have to call the utility company and wait on hold for an hour to get a payment history letter. This is the sweat equity of the no score loan. You have to do the work the credit bureaus usually do for you. And finally, the new heavy hitter, the cash flow assessment. Because you don't have a score, Fannie Mae is going to scan your bank account to see how you manage money. They are gonna look for NSFs—non-sufficient funds if you overdrew your account to buy pizza last month. The computer sees that as a risk factor. If you have a credit score, you can overdraft your account and the mortgage lender might not even see it. But if you have no score, the overdraft is a red flag. It tells the system that you can't manage your cash flow. So here's the ugly truth. Yes, you can get a loan without a score, but you have to live financially perfect for 12 months. Perfect rent, perfect bills, positive cash flow. If you can do that, you are actually a better borrower than the guy with a six 40 score who has max status cards and missing payments. The system is finally smart enough to recognize that cashflow matters more than numbers. Just make sure you have the data to prove it Now let's take a moment to check on the street pulse. I was on Reddit this morning and I was cruising through the first time a home buyer page, and I found a post that made me nervous. Not because the borrower is irresponsible, but because they don't understand the surveillance state of modern lending. Here is the situation. We have a user asking, why does everyone say don't use credit cards before closing? I use my credit card for points. 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 bucks on an existing card and pay it off, you have zero debt. But mortgage underwriting isn't based on logic, it is based on snapshots, and you are ignoring a little system we call UDM, undisclosed debt monitoring. Most borrowers think the lender only checks your credit score twice. Once at the start and once at the end. That is the old way. Today, UDM is watching you continuously throughout the transaction. It is looking for new inquiries, but it is also looking for balance spikes. Here is the nightmare scenario. You swipe your existing visa for $3,000 to buy furniture. You plan to pay it off on Friday, but the UDM system takes a snapshot on Wednesday. It sees that your balance jumped from zero to $3,000. It flags the file. Now the underwriter has to assume the debt is real. That $3,000 balance creates a new minimum monthly payment. If your debt to income ratio is tight, that extra payment could technically disqualify you, but even if you qualify, you just created a paperwork nightmare. The underwriter has to stop the file. They have to ask for credit supplement, then they need proof. You paid it off. They need the new statement and suddenly you are delaying your closing by 48 hours because you wanted $30 worth of airline points. It is not about whether you can pay it. It is about whether you want to deal with the friction. So here is the Street Pulse playbook. 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. They move slow, and if you spike a balance, you are giving them more reason to ask more questions. Don't trip over pennies to pick up dollars. Freeze the credit cards until you have keys in hand. You can earn points after you move in. All right, that's the show. Let's recap what we learned today. First, Fannie Mae has changed the game. Six 20 credit score wall is gone for conventional loans. But remember, you will need to prove 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 Big Brother is watching your credit card balances until the moment you sign. Be boring. Boring, gets the keys, excitement, gets you a delay. If you want the clips to share with your skeptical spouse or friend, find us on TikTok and Facebook And hey, if your current loan officer isn't telling you about these no score options, or if they didn't warn you about credit monitoring, maybe it's time to find a new lounge. I am Cortavius Thomas. Remember, the bank has a plan for your money. Make sure you have a better one. The lounge is closed.