United Wholesale Mortgage has removed its minimum credit score overlay for eligible loans sold through Fannie Mae and Freddie Mac, as well as mortgages backed by the Federal Housing Administration, Department of Veterans Affairs and U.S. Department of Agriculture.
Loan eligibility will instead be determined by findings from the automated underwriting systems used across those programs. The shift moves the lender away from a lender-imposed credit-score floor and toward the underwriting outcomes produced by each program's automated review.
For mortgage brokers, the change could widen the range of borrowers whose applications can be assessed through UWM, particularly where a file receives an eligible automated underwriting decision despite a credit profile below a conventional lender overlay.
The policy does not remove program-level underwriting requirements. Borrowers must still satisfy the applicable standards for the loan product, including the conditions reflected in automated underwriting findings. HousingWire reported that the approach applies across Fannie, Freddie, FHA, VA and USDA programs.
