What we verified in “Nontraditional credit for a mortgage: buying with no score”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. According to the Fannie Mae Selling Guide (B3-5.4-01, version of November 5, 2025), if one or more borrowers have no credit score or a limited traditional credit history, the lender must establish an acceptable nontraditional credit history; it must first check all three major credit repositories and make sure the report has the borrower's correct name, Social Security number and current residence. In manual underwriting, when a borrower without a score relies on nontraditional credit to qualify: the property must be a one-unit principal residence; non-occupant co-borrowers are permitted if they meet section B2-2-04; the transaction must be a purchase or limited cash-out refinance; the loan must meet the baseline loan limits (high-balance loans are not eligible); the maximum debt-to-income ratio is 36%; there is no minimum reserve requirement if at least one borrower documents a housing payment history as a reference, otherwise at least 12 months of reserves are required; and a nontraditional credit history must be documented for each borrower without a score.

   Sources 1 · Selling Guide B3-5.4-01, Eligibility Requirements for Loans with Nontraditional Credit (11/05/2025), 'Overview' and 'Manual Underwriting': 'If one or more borrowers do not have a credit score or have a limited traditional credit history, the lender must establish an acceptable nontraditional credit history'; 'The lender must first check all three major credit repositories'; 'such as the name, Social Security number, and current residence of the borrower'; 'The property must be a one-unit, principal residence'; 'Non-occupant co-borrowers are permitted'; 'The transaction must be a purchase or limited cash-out refinance'; 'The loan amount must meet the baseline loan limits'; 'high-balance mortgage loans are not eligible'; 'The maximum debt-to-income ratio is 36%'; 'There is no minimum reserve requirement if at least one borrower can document a housing payment history as one nontraditional credit reference. Otherwise, a minimum of 12 months reserves is required.'; 'A nontraditional credit history must be documented for each borrower without a credit score' · Checked October 17, 2026

2. According to Fannie Mae, a nontraditional credit history is not acceptable if the lender can obtain a score despite the borrower's limited use of credit, if the borrower has enough credit for a score and that score is below the minimum (with an exception for certain HomeReady loans), or if the borrower's traditional history shows significant derogatory references such as a bankruptcy or foreclosure; in that case the borrower must re-establish traditional credit with a score.

   Sources 1 · Selling Guide B3-5.4-01, 'Unacceptable Uses': 'The lender is able to obtain a credit score for the borrower despite the borrower's limited use of credit'; 'the representative credit score is less than the minimum required'; 'An exception is permitted for certain HomeReady loans for borrowers with low credit scores'; 'significant derogatory references, such as a prior bankruptcy or foreclosure'; 'including the establishment of traditional credit and a credit score' · Checked October 17, 2026

3. According to Fannie Mae, if at least one borrower has a credit or installment account on their credit report, the automated DU system assesses risk using that credit and standard rules apply; if no borrower has one, DU requires a one- to four-unit principal residence occupied by all borrowers, a purchase or limited cash-out refinance, and any reserves DU determines; no verification of nontraditional references is needed when DU conducts a cash flow assessment and says the asset verification report may be used; and a loan that does not get an approve recommendation may get a better one if a 12-month asset verification report is obtained.

   Sources 1 · Selling Guide B3-5.4-01, 'DU Loan Casefiles': 'When at least one borrower has a minimum of one credit account or installment account reported on their credit report, DU will assess the risk using the borrower's reported credit'; 'The property must be a one- to four-unit, principal residence, and all borrowers must occupy the property'; 'Reserves may be required as determined by DU'; 'no verification of nontraditional credit references is required for any borrower when DU conducts a cash flow assessment'; 'it may receive a more favorable recommendation if a 12-month asset verification report is obtained' · Checked October 17, 2026

4. According to Fannie Mae (B3-5.4-02, version of February 4, 2026), manually underwritten loans need four credit references for each borrower without a score, or three for HomeReady loans; if a borrower without a score has no references at all, the loan is still eligible if no more than 30% of the qualifying income comes from that borrower; for DU loans, when DU requires a nontraditional history, at least two references per borrower are needed and one must be a housing payment; references must be periodic payments at intervals no longer than every three months; the lender must hold an informational interview to identify all references covering the most recent consecutive 12 months; each reference's history is documented for those 12 months; and all references must be included, not just those showing good performance.

   Sources 2 · Selling Guide B3-5.4-02, Number and Types of Nontraditional Credit References (02/04/2026): 'Four credit references for each borrower without a credit score'; 'Three credit references for each borrower without a credit score'; 'provided no more than 30% of the qualifying income for the loan comes from that borrower'; 'at least two credit references for each borrower are required'; 'must include housing payments as one reference of nontraditional credit'; 'periodic payments on a regular basis with intervals that are no longer than every three months'; 'The lender must conduct an informational interview with the borrower'; 'the payment history for each credit reference must be documented for the most recent consecutive 12-month period'; 'All credit references must be included, not just those that reflect acceptable performance' · Checked October 17, 2026

5. According to Fannie Mae, acceptable housing payments are rent paid to a landlord or management company, a privately held mortgage not reported to the bureaus and real estate taxes on a principal residence owned free and clear; other references can include utilities such as electricity, gas, water, phone, television and internet (if not included in the rent and separately documented), medical and life insurance not paid by payroll deduction, auto insurance, cell phone payments, property or renter's insurance, payments to local stores, leases of durable goods such as cars, medical bills, school tuition, childcare, a loan from an individual with written terms, checking or savings accounts whose balance grows through periodic deposits over at least 12 months, and wire remittance statements showing a consistent amount sent over the most recent 12 months.

   Sources 2 · Selling Guide B3-5.4-02, 'Acceptable Housing Payments' and 'Other Nontraditional Credit References': 'Rent: payments made to a landlord or property management company'; 'Privately held mortgage loan'; 'Real estate taxes: payments made on the principal residence'; 'Utilities, such as electricity, gas, water, telephone service, television, and internet service providers'; 'If utilities are included in the housing payment, they cannot be considered a separate nontraditional credit reference'; 'Medical insurance coverage (excluding payroll deductions)'; 'Automobile insurance payments'; 'Cell phone payments'; 'Life insurance policies (excluding payroll deductions)'; 'Payments for property or renter's insurance'; 'Payments to local stores, such as department stores, furniture stores, appliance stores'; 'Rental (or lease) payments for durable goods, such as automobiles'; 'Payment of medical bills'; 'Payment of school tuition'; 'Payments for childcare'; 'A loan obtained from an individual, provided the repayment terms can be documented in a written agreement'; 'provided the records reflect an increasing balance as a result of periodic deposits over at least the most recent 12 months'; 'Wire remittance statements demonstrating a consistent amount of funds remitted over the most recent 12-month period' · Checked October 17, 2026

6. According to Fannie Mae (B3-5.4-03, version of February 7, 2024), the nontraditional history can be documented from the borrower, from the creditor or with a nontraditional mortgage credit report from a credit reporting agency; for rent, canceled checks are accepted or, instead, bank statements, copies of money orders or other reasonable methods that clearly show the payee and amount, or direct verification from the landlord, whether an individual or a management company; if two borrowers share the housing reference (for example, both are on the lease), it counts as one reference for each even if only one paid; creditor references must state late payments in a times-30/60/90-days format, and vague statements such as 'current' are not acceptable by themselves; borrower documentation can be the debt terms with canceled checks or bills marked paid, or bank statement debits clearly showing the creditor; and overdrafts on account statements suggest a weakness the lender must assess.

   Sources 3 · Selling Guide B3-5.4-03, Documentation and Assessment of a Nontraditional Credit History (02/07/2024): 'directly from the borrower or the creditor, or by obtaining a nontraditional mortgage credit report from a consumer reporting agency'; 'In lieu of canceled checks, the lender may use the borrower's bank statements, copies of money orders, or other reasonable methods for documenting timely housing payments'; 'The documentation must clearly indicate the payee and amount being paid'; 'Direct landlord verification is acceptable whether the landlord is an individual or a professional management company'; 'that documentation counts as one nontraditional credit reference for each borrower, even if only one borrower has been making the payments'; 'are not acceptable by themselves'; 'withdrawals or debits on the borrower's bank statements that show the payee information clearly listed'; 'If the account statements demonstrate overdraft activity, that information suggests a weakness' · Checked October 17, 2026

7. According to Fannie Mae, if a non-U.S. citizen or foreign borrower lacks enough credit references in the United States, the lender must use credit references from foreign countries to reach the required number.

   Sources 3 · Selling Guide B3-5.4-03, 'Non-U.S. Citizen and Foreign Borrowers': 'If a non-U.S. citizen or foreign borrower lacks sufficient credit references in the United States'; 'the lender must use credit references from foreign countries to achieve the required number of nontraditional credit references' · Checked October 17, 2026

8. According to Fannie Mae, for each nontraditional reference there can be no late housing payments in the past 12 months; only one account, excluding housing, can have a 30-day late payment in the past 12 months; there can be no collections (other than medical) or judgments filed in the past 24 months; and even without a score, the lender must consider any derogatory items on the credit report.

   Sources 3 · Selling Guide B3-5.4-03, 'Assessment of the Payment History for Nontraditional Credit References': 'There cannot be any delinquency on housing payments within the past 12 months'; 'Only one account, excluding housing payments, can have a 30-day delinquency in the past 12 months'; 'No collections (other than medical collections) or judgments have been filed in the past 24 months'; 'the lender must still consider any derogatory credit references that appear on the credit report' · Checked October 17, 2026

9. According to Fannie Mae (B3-2-03, version of February 5, 2025), DU can consider your rent payment history found on a 12-month asset verification report or your credit report and uses it to positively supplement the risk assessment; at least one borrower must have rented for at least 12 months with monthly rent of $300 or more and have no mortgage on their credit report, a limited credit history or no credit score; if the rent is not on the credit report, the lender must enter the monthly rent in the application, get an asset verification report with 12 months of bank data and confirm that the account is yours and is the one you pay rent from.

   Sources 4 · Selling Guide B3-2-03, Risk Factors Evaluated by DU (02/05/2025), 'Rent Payment History': 'DU can consider a borrower's rent payment history identified on a 12-month third-party asset verification report or a credit report'; 'it will use the rent payment history to positively supplement the credit risk assessment'; 'At least one borrower must have been renting for at least 12 months with a monthly rent payment of $300 or more'; 'have no mortgage reported on their credit report'; 'have a limited credit history'; 'have no credit score'; 'enter the monthly rent paid by the borrower in the online loan application'; 'obtain an asset verification report with 12 months of bank statement data'; 'confirm the borrower is an account holder and that the account provided in the asset verification report is the one from which the borrower pays rent' · Checked October 17, 2026

10. According to Fannie Mae, DU can conduct a cash flow assessment when the lender provides a 12-month asset verification report for the borrower, and if DU then issues an approve recommendation, that report may also satisfy the nontraditional credit requirement for a borrower without a score.

    Sources 4 · Selling Guide B3-2-03, 'Cash Flow Assessment for Certain Loan Casefiles': 'DU can conduct a cash flow assessment when the lender provides a 12-month third-party asset verification report for the borrower'; 'the 12-month asset verification report may also be used to satisfy the nontraditional credit history requirements' · Checked October 17, 2026

11. According to Fannie Mae (B2-2-06, version of November 5, 2025), at least one borrower must complete homeownership education before closing if no borrower on a DU purchase has a credit or installment account on their credit report, or if no borrower on a manually underwritten purchase has a credit score; the education can be in person, online, by phone or hybrid; and instead of the course the borrower may receive housing counseling, which must be provided by a HUD-approved agency.

    Sources 5 · Selling Guide B2-2-06, Homeownership Education and Housing Counseling (11/05/2025): 'at least one borrower on the loan must complete homeownership education prior to loan closing'; 'if none of the borrowers on a purchase transaction underwritten in DU has at least one credit account or installment account reported on their credit report'; 'if all borrowers on a manually underwritten purchase transaction do not have a credit score'; 'The education may be delivered in various formats (in-person, Internet, via telephone, or a hybrid format)'; 'In lieu of homeownership education, the borrower may receive housing counseling'; 'Housing counseling must be provided by a HUD-approved agency' · Checked October 17, 2026

12. According to HUD Handbook 4000.1 (FHA), if no traditional credit report is available, the lender must develop the borrower's credit history using the nontraditional and insufficient credit rules; for a borrower without a score, it must either obtain a nontraditional mortgage credit report (NTMCR) or develop the history independently; and borrowers with nontraditional or insufficient credit are eligible for maximum financing but must be manually underwritten.

    Sources 6 · HUD Handbook 4000.1 ('Last Revised: 8/12/2026'), II.A.5.a.ii, p. 279: 'if a traditional credit report is not available, the Mortgagee must develop the Borrower's credit history using the requirements for Non-traditional and Insufficient Credit (Manual)'; II.A.5.a.ii(B), p. 281: 'For Borrowers without a credit score, the Mortgagee must either obtain a'; 'independently develop the Borrower's credit history'; II.A.2.b.i, p. 179: 'Borrowers with non-traditional or insufficient credit histories are eligible for maximum financing but must be underwritten using the procedures in Manual Underwriting of the Borrower' · Checked October 17, 2026

13. According to HUD, the nontraditional mortgage credit report (NTMCR) is designed to capture the history of a borrower without the kinds of accounts that appear on a traditional report; it may not include subjective statements such as 'satisfactory' and must show, among other items, a 12-month history of each account; if the lender verifies references independently, it must use a published address or phone number for the provider and get 12 months of canceled checks or equivalent proof of payment; for rent, it may use a reference from the management company covering the most recent 12 months instead, provided the borrower is not renting from a family member.

    Sources 6 · HUD Handbook 4000.1, II.A.5.a.ii(B)(1)–(2), pp. 281–282: 'designed to access the credit history of a Borrower who does not'; 'have the types of trade references that appear on a traditional credit report'; 'must not include subjective statements such as'; '12-month history of the account'; 'use a published address or telephone number for the credit provider'; 'obtain the most recent 12 months of canceled checks, or equivalent proof'; 'provided the Borrower is not renting from a Family Member' · Checked October 17, 2026

14. According to HUD, to be sufficient the credit history must include three credit references, at least one of which is rental housing payments (independently verified if you rent), telephone service or a utility (gas, electricity, water, television or internet, if not included in the rent); if all three cannot be obtained from that list, the lender may use unreported recurring debts such as insurance premiums not paid by payroll deduction, payments to child care businesses, school tuition, retail store cards, rent-to-own, the part of medical bills not covered by insurance, 12 months of savings with regular deposits that increase the balance, a car lease, a personal loan with written terms, or 12 months of payments on an account where you are an authorized user.

    Sources 6 · HUD Handbook 4000.1, II.A.5.a.ii(B)(3), pp. 282–283: 'the credit history must include three credit references, including at least one of the following'; 'rental housing payments (subject to independent verification if the Borrower is a renter)'; 'telephone service'; 'utility company reference (if not included in the rental housing payment)'; 'the Mortgagee may use the following sources of unreported recurring debt'; 'insurance premiums not payroll deducted'; 'payment to child care providers made to businesses that provide such services'; 'school tuition'; 'retail store credit cards'; 'rent-to-own'; 'payment of that part of medical bills not covered by insurance'; 'a documented 12-month history of savings evidenced by regular deposits'; 'resulting in an increased balance to the account that'; 'an automobile lease'; 'a personal loan from an individual with repayment terms in writing'; 'a documented 12-month history of payment by the Borrower on an account for which the Borrower is an authorized user' · Checked October 17, 2026

15. According to HUD, the underwriter must look at the overall pattern of credit behavior, not just isolated late payments; it may consider the history acceptable if all housing and installment payments were on time for the past 12 months with no more than two 30-day late payments in the past 24 months; a housing payment is late if not paid within the month due; and housing history can be confirmed through the credit report, direct landlord verification (if the landlord has no identity of interest with the borrower) or canceled checks covering the most recent 12 months.

    Sources 6 · HUD Handbook 4000.1, II.A.5.a.iii, pp. 283–285: 'The underwriter must examine the Borrower's overall pattern of credit behavior, not just isolated unsatisfactory or slow payments'; 'if the Borrower has made all housing and installment debt payments on time for'; 'the previous 12 months and has no more than two 30-Day late Mortgage'; 'Payments or installment payments in the previous 24 months'; 'A Mortgage Payment is considered delinquent if not paid within the month due'; 'verification of rent received directly from the landlord (for landlords with'; 'a review of canceled checks that cover the most recent 12-month period' · Checked October 17, 2026

16. According to HUD, in manual underwriting, borrowers with no credit score (or a score below 580) may not exceed 31/43: the total mortgage payment may not exceed 31% of effective income and total fixed payments 43%; and in those cases ratios are computed using income only from borrowers who will occupy the property and are obligated on the mortgage: a non-occupant co-borrower's income may not be included.

    Sources 6 · HUD Handbook 4000.1, II.A.5.a.viii 'Approvable Ratio Requirements (Manual)', pp. 358–359: 'The maximum Total Mortgage Payment to Effective Income Ratio (PTI) and Total Fixed'; 'Payments to Effective Income Ratio, or DTI'; 'The qualifying ratios for Borrowers with no credit score are computed using income only'; 'from Borrowers occupying the Property and obligated on the Mortgage'; 'Non-occupant co-Borrower income may not be included'; 'Scores below 580, or with no credit score may not exceed'; '31/43 ratios' · Checked October 17, 2026

17. According to FHFA (last updated October 2, 2026), the newer credit score models approved for Fannie Mae and Freddie Mac take into account additional sources of data, including rent payment history, and lenders can currently choose between Classic FICO and VantageScore 4.0 for loans sold to them.

    Sources 7 · Credit Scores (FHFA, 'Last updated: October 2, 2026'): 'These new models take into account additional sources of data, including rent payment history'; 'Currently, lenders may choose between Classic FICO or VantageScore 4.0 for loans sold to the Enterprises' · Checked October 17, 2026

18. HUD-approved housing counselors give independent advice on buying a home, renting, defaults and credit issues, often at little or no cost.

    Sources 8 · Find a Housing Counselor: 'Housing counselors throughout the country can provide advice on buying a home, renting, defaults, forbearances, foreclosures, and credit issues'; 'they can offer independent advice, often at little or no cost to you' · Checked October 17, 2026