If you’re asking how to get a mortgage with no credit score, a conventional loan is still possible. Instead of a score, the lender can build a credit history from regular payments you already make, like rent, documented over the most recent 12 consecutive months.
A conventional loan isn’t backed by a government program, and Fannie Mae’s Selling Guide sets these rules. The guide is the rulebook for conventional loans that lenders sell to Fannie Mae. FHA, VA and USDA loans follow their own, so your loan officer tells you which apply to yours.
The path comes with limits on a file a person reviews. That means a primary home only, debt-to-income no higher than 36%, and possibly 12 months of reserves. The records and the cash need to be ready before you apply.
Can You Get a Mortgage Without a Credit Score?
Yes. Under Fannie Mae’s Selling Guide on loans with nontraditional credit, a borrower with no score or a limited credit history can still move forward. The lender builds a nontraditional credit history instead, which is a record of regular bills you’ve paid that don’t show up on a credit report. First it checks all three major credit repositories.
When one or more borrowers have no score or only a limited traditional credit history, the guide says “the lender must establish an acceptable nontraditional credit history”. Building it is the lender’s job.
The lender checks first. The guide says “The lender must first check all three major credit repositories”, and the report indicates whether a score couldn’t be produced because of insufficient credit. Fannie Mae also has the lender make sure the report used your correct name, Social Security number and current address, so a missing score isn’t a reporting mistake.
When Doesn’t Nontraditional Credit Work?
It’s for people with no score, not a low one. The guide doesn’t allow it when the lender can get a score despite limited use of credit, when the score is below the minimum, or after significant derogatory items like a bankruptcy or foreclosure. In that last case, the guide expects re-established credit, including traditional credit and a score.
Fannie Mae also rules it out when a borrower has enough credit to get a score and “the representative credit score is less than the minimum required”. That rule allows an exception for certain HomeReady loans for borrowers with low credit scores, and a loan officer can tell you whether it applies to your loan.
Not every borrower who worries about credit is missing a score. If you do have one, here’s what credit score you need for each loan type.
What Payments Count as Nontraditional Credit?
Fannie Mae’s Selling Guide on nontraditional credit references counts bills you pay on a regular schedule, at least every three months. On that list, housing comes first: rent to a landlord or property manager, a mortgage that isn’t on your credit report, or property taxes on a home you own outright.
The guide counts payments “with intervals that are no longer than every three months”, and for rent it means “payments made to a landlord or property management company”. Real estate taxes on the home you live in count whatever the payment schedule.
Fannie Mae lists other regular payments that can serve as references:
- Utilities such as electricity, gas, water, phone, television and internet service
- Medical and life insurance you pay yourself, not through payroll deductions, plus auto, property or renter’s insurance
- Cell phone payments, plus payments to local stores such as furniture or appliance stores
- Rental or lease payments on durable goods, like a car
- Medical bills, school tuition and childcare
- A loan from an individual with repayment terms in a written agreement, or savings with a balance that grew from regular deposits over at least the most recent 12 months
Utilities count only on their own: “Utilities can be considered a credit reference only if the payment history can be separately documented.” Under that rule, utilities included in your rent can’t count as a separate reference.
How Many Payment Records Do You Need?
For a file a person reviews, the guide asks for four references for each borrower without a score, or three on a HomeReady loan. When DU asks for a nontraditional history, at least two are needed for each borrower. DU is Fannie Mae’s automated underwriting system, which the lender runs.
Fannie Mae puts it this way for a manually underwritten loan: “Four credit references for each borrower without a credit score”. Manual underwriting means a person at the lender reviews the file against the guide. On DU files, “at least two credit references for each borrower are required”.
Each one needs history behind it, because “the payment history for each credit reference must be documented for the most recent consecutive 12-month period”. The guide adds, “All credit references must be included, not just those that reflect acceptable performance.” A month you paid late stays in the file with the rest.
The guide has the lender run an informational interview with you to identify every credit reference covering those 12 consecutive months. If the lender orders a nontraditional mortgage credit report from a consumer reporting agency, that agency conducts the interview.
On a manually underwritten HomeReady loan, a co-borrower with no score and no references at all doesn’t make the loan ineligible. The guide allows that “provided no more than 30% of the qualifying income for the loan comes from that borrower”.
What Limits Apply When a Person Reviews the File?
On a manually underwritten loan with a borrower relying on nontraditional credit, the guide requires a one-unit principal residence, the home you live in. The loan has to be a purchase or limited cash-out refinance within the baseline loan limits. Debt-to-income compares your monthly debt payments with your income, and 36% is the ceiling. The guide doesn’t allow high-balance loans.
Fannie Mae’s wording is direct: “The property must be a one-unit, principal residence.” That rule pairs with another: “The transaction must be a purchase or limited cash-out refinance.” On the ratio, the guide says, “The maximum debt-to-income ratio is 36%.”
With $5,000 of monthly income, 36% is $1,800 a month. All your monthly debt payments together, including the new mortgage payment, have to fit under that figure.
Reserves are money you’d still have after closing. Under the guide, there’s no minimum reserve requirement if at least one borrower can document a housing payment history as one nontraditional credit reference. If no borrower can, Fannie Mae’s rule reads, “Otherwise, a minimum of 12 months reserves is required.”
That makes a rent history worth documenting. It can decide whether you need 12 months of reserves on top of the down payment and closing costs.
Does Automated Underwriting Change Anything?
Yes. If at least one borrower has a credit account or installment account on the credit report, DU assesses the risk using that reported credit and the loan follows standard eligibility guidelines. If no borrower has one, the guide allows a one- to four-unit principal residence that all borrowers occupy, for a purchase or limited cash-out refinance.
On reserves, the guide says, “Reserves may be required as determined by DU.” On a DU file that needs a nontraditional history, Fannie Mae requires a housing payment as one of the references.
When DU conducts a cash flow assessment of your bank account activity and issues a message that a third-party asset verification report may be used, no nontraditional references have to be verified. If the casefile doesn’t receive an approval recommendation, the guide notes, “In some cases the loan may still be eligible for manual underwriting.”
How Should You Prepare Before You Apply?
Start with the records. Gather 12 consecutive months of rent payments, plus the other regular bills you pay in your own name. Plan cash for the down payment, closing costs and possibly 12 months of reserves. Then ask a loan officer which review path fits your file.
Fellowship’s team looks at the whole file when you apply. In the team’s words: “We holistically assess income, debt-to-income ratio, credit score, employment trajectory, and property type to determine eligibility.” It adds: “Each loan program has different sets of eligibility guidelines.”
Knowing the order of the steps helps you plan the paperwork. You can see how the Fellowship mortgage process works before you start.
The guide’s no-score section also points to its homeownership education and housing counseling requirements, so ask whether a course applies to your loan. Here’s whether you have to take a homebuyer education course.
Fellowship’s home purchase loan page covers the loans for buying a home.
Frequently Asked Questions About Buying a Home With No Credit Score
Does rent count as credit for a mortgage?
Under Fannie Mae’s guide, rent paid to a landlord or property management company works as a housing payment reference for a nontraditional credit history. The payment history covers the most recent 12 consecutive months. A DU file that needs a nontraditional history has to include a housing payment as one reference.
Can I use nontraditional credit if my credit score is low?
No. Fannie Mae’s guide doesn’t allow a nontraditional credit history when a score can be produced for you, or when the score is below the minimum required. It permits an exception for certain HomeReady loans for borrowers with low scores, so ask a loan officer to review your options.
How far back do the payment records need to go?
Each reference needs the most recent 12 consecutive months of payment history under Fannie Mae’s guide. Every credit reference has to be included, not only the ones that show acceptable performance, so build the list from all of the regular payments you make.
Can I buy a duplex or a vacation home with no credit score?
On a manually underwritten file, Fannie Mae’s guide limits the property to a one-unit principal residence. A DU file where no borrower has reported credit allows one to four units, but every borrower has to live there. Both paths are for the home you live in.
Will I need cash reserves?
On a manually underwritten file, Fannie Mae’s guide sets no minimum reserve requirement if a borrower documents a housing payment history as one reference. Without that, the file needs a minimum of 12 months of reserves. On a DU file, reserves may be required as DU determines.
Do FHA or VA loans work the same way?
No. FHA and VA loans follow their own program rules, which aren’t covered by Fannie Mae’s guide. The rules in that guide apply to conventional loans lenders sell to Fannie Mae. Ask your loan officer which rules apply to the loan you’re considering.
What to Gather Before You Apply
A mortgage with no credit score leans on your payment records instead of a credit report. Collect them early, plan the cash, and bring your questions to a loan officer. The lender builds the nontraditional history from those 12 consecutive months of payments.
- 12 consecutive months of rent or other housing payments
- 12 months of records for other bills in your own name, such as utilities, insurance, phone, childcare or tuition
- A cash plan for the down payment, closing costs and possibly 12 months of reserves
- Questions for your loan officer: which review path applies, how many references you need, and whether a homebuyer course applies
When you’re ready, talk with a Fellowship loan officer about your home purchase. Bring the records and the questions with you.
