Fannie Mae No Longer Requires a Credit Check — What This Means for Home Buyers in Los Angeles, Calabasas & Woodland Hills

A major shift in the mortgage world is creating new opportunities for Southern California buyers: Fannie Mae no longer requires a traditional credit score for certain home loans.

This change is especially meaningful for home buyers across Los Angeles, Calabasas, and Woodland Hills, where high property values, strong competition, and strict lending requirements have historically made mortgage approvals more difficult.

Now, buyers who have strong income, steady cash flow, and responsible financial habits, but lack a credit score, finally have a path to homeownership.

(Source for industry policy reference: https://www.housingwire.com — HousingWire)

What This New Fannie Mae Rule Actually Means

The update doesn’t mean lenders ignore your financial background. Instead, Fannie Mae now allows lenders to approve borrowers even if they do not have a traditional FICO credit score.

This benefits buyers who:

• Avoid credit cards

• Recently re-established financial stability

• Use cash or debit instead of credit

• Have never built credit

• Are self-employed or gig-economy earners

• Have strong bank balances but limited credit history

Instead of relying exclusively on a score, Fannie Mae’s automated underwriting system reviews real life financial behavior, including:

• Cash-flow patterns

• Rent payment history

• Bank account deposits

• Utility payments

• Income stability

• Savings and reserves

This is a major step forward for borrowers in markets where prices often exceed $900,000 to $3 million.

Why This Is Such a Big Deal in Los Angeles, Calabasas & Woodland Hills

1. These areas have some of the highest home prices in California

The price of entry into Calabasas, Woodland Hills, and many parts of Los Angeles already creates major lending challenges. Removing the credit score barrier helps buyers who historically couldn’t qualify, even with strong income.

2. Renters with excellent payment history finally benefit

Local renters often pay $3,500–$8,000 per month, yet none of that helped toward mortgage approval under old rules. Today, Fannie Mae allows rental history to strengthen your loan application.

3. Self-employed buyers gain flexibility

Los Angeles is full of entrepreneurs, creatives, influencers, and gig workers. Many earn excellent income but don’t build credit traditionally.
Now, consistent deposits and cash flow matter more.

4. First-time buyers have a fair shot

Before this update, many first-time buyers waited years to build a credit score. Now, they can qualify based on their actual financial behavior  not credit card usage.

How Lenders Approve You Without a Credit Score

Here’s what lenders look for under the new guidelines:

✔ 12–24 months of bank statements

Demonstrating stable deposits and responsible spending.

✔ Proof of consistent rent payments

This is one of the strongest non-credit indicators.

✔ Income and employment verification

W-2, 1099, or self-employed tax returns depending on the borrower.

✔ Cash reserves

Savings, business accounts, or asset accounts help significantly.

✔ Utility and recurring payment history

A track record of on-time payments works in your favor.

This method is known as "cash-flow underwriting", and it is designed to evaluate financial stability more accurately than a credit score alone.

Benefits for Buyers in High-Demand Los Angeles Communities

Better approval odds for strong earners without credit history

Short-tail keyword: no credit mortgage approval

More flexibility for self-employed professionals

Long-tail keyword: how self-employed buyers in Los Angeles qualify without a credit score

Faster paths to homeownership for renters

Short-tail keyword: rent payment mortgage approval

Lower barriers for first-time homebuyers

Long-tail keyword: first-time home buyer mortgage without a credit score in Los Angeles

Potential Drawbacks You Should Be Aware Of

While the policy is a positive change, keep these points in mind:

• Some lenders still require a minimum credit history

• Interest rates may vary without a score

• Documentation requirements may be higher

• Not every mortgage program qualifies

Working with a lender familiar with Fannie Mae’s new no-credit-score system is essential in high value areas like Calabasas and Woodland Hills.

Tips to Improve Your Approval Chances in Los Angeles

Here’s how to strengthen your application:

• Keep your bank accounts stable

• Avoid large undocumented deposits

• Maintain consistent income flow

• Provide full documentation for self-employment

• Keep rent payments fully verifiable

• Prepare 2 years of tax returns

• Keep reserves in checking or savings accounts

Small changes in financial presentation can significantly affect approval.

Who Will Benefit the Most in Southern California?

1. First-Time Buyers in Woodland Hills

Many renters with strong payment history can now purchase without building credit first.

2. Relocating Families Moving to Calabasas

Families who paid rent consistently but avoided credit cards now qualify more easily.

3. Entertainment & Creative Professionals in Los Angeles

Producers, actors, musicians, editors, and digital creators often work contract-to-contract or 1099. Their cash-flow is now weighted heavier than their credit score.

Frequently Asked Questions

1. Does Fannie Mae truly allow mortgages without a credit score?

Yes. Borrowers can be approved using cash-flow and alternative financial data instead of a traditional FICO score.

2. Do I still need good financial history?

Yes. Income, assets, rent, and cash flow must demonstrate stability.

3. Can self-employed buyers qualify?

Absolutely — this change benefits self-employed buyers the most.

4. Will interest rates be higher?

Rates vary by lender, but some may charge slightly higher rates without a credit score.

5. Does this apply to jumbo loans?

Not yet,  but it applies to conforming loan limits, which still offer significant benefits in L.A.

6. Can renters qualify using rent payments alone?

Rent is a major factor, but lenders also look at deposits, income, and overall financial patterns.

Conclusion

The fact that Fannie Mae no longer requires a credit check is one of the most important mortgage updates in years. For buyers in Los Angeles, Calabasas, and Woodland Hills, this opens the doors to homeownership in some of California’s most competitive markets.

If you’ve been held back simply because you lacked a credit score, now is the perfect time to explore your options.