For those seeking a Bellevue home mortgage, getting approved has become more difficult after changes were made by Fannie Mae. Fannie Mae issues most of the conventional loans issued in the US. Freddy Mac is the other agency that issues conventional loans. They have not issued updated rules yet but usually follow suit.

Fannie has lowered the maximum allowable debt to income ratios from around 65% to 45% with exceptions to 50%. A 45% debt ratio is considered standard but higher debt allowances have allowed borrowers to be approved when a spouse could not be on a loan due to credit issues even though they could afford a home based on total household income. That will no longer be possible. They also raised the minimum credit score requirement to 620. Computer generated approvals called ‘automated findings' used to allow much lower scores if the rest of the loan file was strong.

A whole category of loan approvals called Exception Level approvals have been eliminated. Critics of these loan approvals accused Fannie Mae of issuing sub prime loans. These approvals were usually issued to those with a large amount of derogatory credit events. These approvals had two different designations called EA I and EA II. The approvals were given this designation by Fannie Mae's approval system when automated findings were run. The designation called for increases in interest rates to accommodate the higher risk of lending to such borrowers. These approvals will no longer be issued.