Conventional loans · Fannie Mae B3-5.4Getting a mortgage without a credit score: Fannie Mae's nontraditional credit rules

When a buyer has no credit score because they have too little credit, Fannie Mae lets the lender build a nontraditional credit history instead – after first checking all three credit bureaus and confirming the report was ordered with the right name, Social Security number and address. It cannot be used if a score exists but is too low (HomeReady has a limited exception), or to get around a bankruptcy or foreclosure. Nontraditional references are regular payments due at least every three months, documented for the most recent 12 consecutive months – all of them, not just the good ones: rent paid to a landlord or management company, payments on a privately held mortgage or contract for deed, property taxes on a home owned free and clear, and others such as utilities and telephone. Rent can be shown with canceled checks, bank statements, money orders or a direct verification from the landlord; other creditors must state the payment history as 0 × 30, 0 × 60, 0 × 90 days late. On a manually underwritten loan, the home must be a one-unit principal residence, the loan a purchase or limited cash-out refinance within the baseline loan limit, and DTI no more than 36%; each borrower without a score needs four references (three for HomeReady); and if no borrower can document a housing payment history, 12 months of reserves are required. A borrower with no references at all can still be on the loan if no more than 30% of the qualifying income is theirs. When Desktop Underwriter asks for nontraditional credit, at least two references per borrower are needed, one of them a housing payment.