Conventional No Score
Did you know Fairway now accepts non-traditional credit for borrowers who do not have a valid credit score on conventional loans?
Conventional Loans for borrowers with no credit score that are run through DU and/or LPA that receive an Approve/Eligible or Accept/Eligible, and meet the requirements below are eligible to be submitted to Fairway.
For complete guideline information, refer to Fairway’s Wholesale Underwriting Guidelines. Guideline highlights are below:
DU Loan Casefiles: No Borrower Has a Credit Score per B3-5.4-01
Lenders may submit loan case files to DU when no borrower has a credit score. DU will apply the following requirements:
- The property must be a one-unit, principal residence, and all borrowers must occupy the property. Investment properties and second homes are not eligible.
- All property types are permitted, with the exception of manufactured housing.
- The transaction must be a purchase or limited cash-out refinance. Cash-out refinances are not eligible.
- The loan amount must meet the general loan limits. High-balance mortgage loans are not eligible.
- The loan must be a fixed-rate mortgage.
- The maximum LTV, CLTV, and HCLTV ratios are 90%.
- The debt-to-income ratio must be less than 40%.
- Reserves may be required as determined by DU.
- A nontraditional credit history must be documented for each borrower without a credit score. See “Required Documentation Requirements” and “Assessment of the Payment History for Nontraditional Credit History" in the Nontraditional Credit History topic of the Fairway Guidelines for additional information.
Mortgages Where No Borrower has a Credit Score
For mortgages where no Borrower has a Credit Score, Loan Product Advisor will apply the following requirements:
- The transaction must be a purchase or "no cash-out" refinance mortgage. Cash-out refinances are not eligible.
- The mortgage must be secured by a 1-unit property and all Borrowers must occupy the property as their Primary Residence. Investment properties and second homes are not eligible.
- The loan-to-value (LTV), total LTV (TLTV) and Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios must not exceed 95%.
- The mortgage must be a fixed-rate mortgage.
- The mortgage must not be:
º Secured by a Manufactured Home
º A High Balance Mortgage
In addition, the mortgage must meet the following requirements:
- Each Borrower must have at least two payment references in the United States comprised of Noncredit Payment References (guides can be found in the Fairway Guidelines) and/or trade lines not appearing on the credit report. If two or more Borrowers have the same payment reference, then the payment reference may count for each of those Borrowers.
- Additionally, the requirements indicated in the Nontraditional Credit topic (found in the Fairway Guidelines) must be met for all credit references.
As a reminder, see below for the FICO requirements for FHA, VA and USDA:
© 2017 Fairway Independent Mortgage Corporation NMLS ID #2289. 4801 S. Biltmore Lane, Madison, WI 53718. Equal Housing Lender. Some products may not be available in all states. Credit and collateral are subject to approval. This is not a commitment to lend. Not all customers will qualify. Programs, rates, terms and conditions are subject to change without notice. Terms and conditions apply. All rights reserved. Licensed by the Department of Business Oversight under the California Finance Lenders Law. Loans made or arranged pursuant to a California Finance Lenders Law License.
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