© 2022 Fannie Mae
Overview
Eective September 2021, for loans with multiple borrowers, Desktop Underwriter® (DU®) no longer uses the representative
credit score — determined by identifying each borrower’s applicable credit score and using the lowest score across borrowers —
to conrm mortgage loans comply with its minimum 620 credit score requirement. For these loans, DU now uses an average of
each borrower’s median credit score — the “average median credit score.” The representative credit score is used for pricing
and loan delivery.
The following graphic illustrates how the average median credit score and the representative credit score are used in the loan
origination process:
Credit score eligibility in Desktop Underwriter (DU)
for multiple borrowers
Additional resources:
• Selling Guide B3-5.1-01, General Requirements for Credit Scores (09/01/2021)
• Selling Guide Announcement (SEL-2021-08)
• DU Release Notes
DU min. credit score check
DU conrms the average
median credit score meets
the minimum 620 credit score
requirement.
Loan application
Lender pulls credit report
and submits to DU for
underwriting.
DU risk assessment
DU assesses risk without use
of the credit score; if Approve/
Eligible recommendation
returned, proceed to next step.
Pricing
Loan is priced using
representative credit score;
see the Fannie Mae LLPA Matrix.
Loan delivery
Loan is delivered to Fannie
Mae using representative
credit score.
Mortgage insurance
Contact your preferred
mortgage insurer to determine
availability and pricing.
Updated January 2022
© 2022 Fannie Mae
Borrower scenarios
The following scenarios are hypothetical and provided for illustrative purposes only in determining the credit score DU uses to
check that the minimum 620 credit score requirement has been met. Note that loans with an average median credit score of 620
or greater are not guaranteed an Approve/Eligible recommendation in DU. For loans with LTV ratios > 80%, mortgage insurance
is required; contact your preferred mortgage insurer (MI) to determine MI availability and pricing. Loans are subject to applicable
loan-level price adjustments (LLPAs) found on Fannie Mae’s LLPA Matrix.
1
Loans that do not meet the minimum 620 credit score in DU are ineligible.
2
For single borrower loans, average median credit score and representative credit score are the same.
3
Average median credit score is used to determine DU eligibility.
4
Representative credit score is used for pricing and loan delivery.
Note: For certain transactions, DU uses the representative credit score (not the average median credit score) to assess whether the minimum credit score
requirement has been met. Refer to the DU Release Notes and Selling Guide announcement for details.
Score 1 Score 2 Score 3
Average median
credit score
3
Representative
credit score
4
Scenario 1
Two borrowers, one with
credit score less than 620
José 590 619 648
656
= (619 + 693) / 2
✓
619
Ali 661 693 693
Scenario 2
Two borrowers, both with
credit scores greater than 620
Maria 620 628 629
643
= (628 + 658) / 2
✓
628
Li 647 658 661
Scenario 3
Two borrowers, both with
credit scores less than 620
Mary 580 611 630
613
1
= (611 + 615) / 2
X
N/A
Abdul 627 615 608
Scenario 4
One borrower with credit
score greater than 620
Brianna 610 625 633
625
2
✓
625
Scenario 5
Two borrowers, one with
credit score less than 620 and
one with only two scores
Jean 595 618 622
638
= (618 + 658) / 2
✓
618
Isaiah 658 684 N/A
Scenario 6
Two borrowers, one with no
credit scores
Michael 586 617 632
617
1
X
N/A
Aleksander N/A N/A N/A
Scenario 7
Three borrowers, two with
credit scores less than 620
and one with only two scores
Joseph 588 614 623
621
= (614+608+641) / 3
✓
608
Darius 600 608 621
Ana 641 650 N/A
Scenario 8
Two borrowers, each with
only one score
Robert 599 N/A N/A
631
= (599 + 663) / 2
✓
599
Fatima 663 N/A N/A
© 2022 Fannie Mae
1. How is the average median credit score calculated?
The score for each borrower is determined by using the middle of three scores or the lower of two scores; the score for each
borrower is then averaged to determine the average median credit score for the loan (standard rounding to a whole number
applies, e.g., ≥ 0.5 is rounded up to the next whole number).
2. Does this apply to all loans?
No, a minimum representative credit score of 620 is used to determine eligibility for:
• Manually underwritten loans
• ReNow™ loans
• Government loans
Further, the representative credit score is used to determine if the required minimum credit score has been met for:
• Single-closing construction-to-permanent loans (see Selling Guide B5-3.1-02, Conversion of Construction-to-Permanent
Financing: Single-Closing Transactions)
• Borrowers with multiple nanced properties (see Selling Guide B2-2-03, Multiple Financed Properties for the Same
Borrower)
3. Can loans using an average median credit score receive an Approve/Eligible recommendation in DU?
The average median credit score calculation is intended to determine whether Fannie Mae’s minimum 620 credit score
requirement is met. As with all loans underwritten in DU, the DU recommendation is based on a comprehensive risk
assessment of an individual loan’s credit and non-credit risk factors.
4. Is the average median credit score on the DU Underwriting Findings report?
Yes. There is a message in the Observation section of the DU Underwriting Findings report that indicates both the
representative credit score and the average median credit score.
5. Which credit score does loan delivery and pricing use?
The representative credit score is used for pricing and loan delivery on all loans, regardless of the credit score used for DU
eligibility. See Selling Guide B3-5.1-02, Determining the Representative Credit Score for a Mortgage Loan for more details.
6. Is pricing impacted when DU uses the average median credit score to determine eligibility?
No. LLPAs are based on the representative credit score of the loan. Note that the LLPAs for credit scores below 620 are
currently the same as for scores of 620–639 except for LTVs above 95%. Refer to the LLPA Matrix for additional details.
7. Do the mortgage insurers provide coverage on these loans if any of the borrowers have a credit score below 620?
Five of the six national MIs have indicated they will insure these loans subject to various conditions, such as application of
existing or new overlays, operational and system changes that may delay coverage availability and, in some cases, state
regulatory approval of new premium rates. Lenders should consult their preferred MI provider(s) to conrm both eligibility
and pricing.
Frequently asked questions
© 2022 Fannie Mae
8. May lenders opt to require a 620 minimum representative credit score for all borrowers, regardless of the
DU recommendation?
Yes. Fannie Mae does not restrict lenders from overlaying stricter requirements at their discretion.
9. Is the avereage median credit score applied to loans with non-occupant co-borrowers?
Yes, DU uses the average median credit score to determine if the loan meets Fannie Mae’s minimum 620 credit score requirement
for loans with more than one borrower regardless of whether one borrower is a non-occupant co-borrower.
10. Is there any impact to Fannie Mae’s Mortgage Backed Securities (MBS) and Credit Risk Transfer (CRT) disclosures?
No, the disclosures are not impacted. For credit scores at origination:
• MBS disclosures reect the representative credit score in the Borrower Credit Score eld.
• Credit Risk Transfer (CRT) disclosures reect each borrower’s representative credit score for the rst two borrowers in the
Borrower Credit Score at Origination and Co-Borrower Credit Score at Origination elds.
1
As a reminder, the credit score is not part of DU’s credit assessment, and DU’s comprehensive risk assessment process remains.
1
If there are more than two borrowers and the borrower’s representative credit score is higher than other co-borrowers’ representative credit scores, the lowest of
the co-borrowers’ representative credit scores will be displayed in the Co-Borrower Credit Score at Origination eld.