Fannie Mae Selling Guide B3-5.1-02 — Determining the Credit Score for a Mortgage Loan

Fannie Mae Selling Guide B3-5.1-02 — Determining the Credit Score for a Mortgage Loan

Effective 2026-04-22 · publisher's stamp for this provision

B3-5.1-02, Determining the Credit Score for a Mortgage Loan (04/22/2026) Introduction This topic contains requirements for determining the loan-level credit score, including: Representative Credit Score Average Median Credit Score - Manual Underwriting Foreign Credit Reports and Credit Scores Representative Credit Score The representative credit score for the loan is determined based on the credit scores of each borrower and is used to determine loan eligibility for manually underwritten loans with only one borrower and for pricing purposes (i.e., assessing LLPAs) on all loans. Follow these steps to calculate the representative credit score for a loan: Step Description 1 Fannie Mae recommends obtaining at least two credit scores for each borrower. Step Description 2 Select a single score for each borrower. • When two credit scores are obtained, choose the lower score. • When three credit scores are obtained, choose the middle score. (If two of the three scores are the same, choose the middle of the three scores. For example: 700, 680, 680 = 680; 700, 700, 680 = 700) 3 If there is only one borrower, the single score for the borrower is the representative credit score for the loan. If there are multiple borrowers, determine the applicable credit score for each individual borrower and select the lowest applicable score from the group as the representative credit score for the loan. If there is a borrower who does not have a credit score, determine the representative credit score for the loan based on the credit scores of the other borrowers on the loan. Average Median Credit Score - Manual Underwriting For certain manually underwritten transactions, the average median credit score is used in place of the representative credit score to determine whether the minimum credit score requirement is met. The following examples demonstrate how to calculate the average median credit score for eligibility purposes. Borrowers on the Loan Application Step 1: Determine each borrower's median score Step 2: Average the median scores to determine the score for the loan Borrower Scores: 590, 605, 648 Average: Not applicable Representative credit score = 605 Borrower 1 Borrower 2 Scores: 590, 605, 648 Median = 605 Scores: 661, 693, 693 Median = 693 Average: (605+693)/2 = 649 Representative credit score = 605 Borrower 1 Borrower 2 Scores: 590, 605 Median = 590 Scores: 661, 693, 693 Median = 693 Average: (590+693)/2 = 642 Representative credit score = 590 Foreign Credit Reports and Credit Scores With the exception of loan casefiles underwritten through DU, Fannie Mae permits the lender to use a credit report from a foreign country to document a borrower's credit history. (See B3-5.2-01, Requirements for Credit Reports.) If a credit score is provided with the foreign credit report it cannot be used to establish eligibility, or be delivered to Fannie Mae unless the credit score is an approved credit score model, as required by B3-5.1-01, General Requirements for Credit Scores. If the lender relies on credit reports from foreign countries to document borrower credit histories, the credit report must meet the requirements and standards for domestic reports and must be completed in English or include an English translation. See Section B3–5.4, Nontraditional Credit History, for requirements that apply when a loan includes a borrower without an acceptable credit history.

Source: Fannie Mae Selling Guide B3-5.1-02 — Determining the Credit Score for a Mortgage Loan · source URL · snapshot 2897f21e1e729b42