Fannie Mae Shares Plunge Following Landmark Lending Policy Shift

Fannie Mae experienced a severe market downturn on Wednesday, with its stock price collapsing by more than 10% to settle at $9.55. This dramatic sell-off was triggered immediately after the mortgage finance giant revealed it would eliminate its minimum credit score requirement—a fundamental policy revision expected to transform the home lending landscape.

Investors endured a turbulent trading session as the stock swung through a 19% range, reaching a peak of $10.93 before plunging to a low of $9.17. The intense selling pressure was evidenced by trading volume of approximately 6 million shares, significantly exceeding the stock's average activity.

Starting November 16, 2025, Fannie Mae will remove the 620-point minimum credit score threshold for loan approvals. The company's automated Desktop Underwriter system will instead conduct a holistic assessment of each borrower's complete financial profile. This strategic move is designed to broaden mortgage accessibility, particularly for applicants with limited credit history or non-traditional financial backgrounds.

Market Reaction Contrasts with Regulatory Stance

While FHFA Director Bill Pulte characterized the policy update as "a big deal for consumers" but "little or nothing for lending," market participants delivered a starkly different verdict. The sharp decline reflects deep investor concern over potentially elevated credit risks within the mortgage provider's extensive portfolio.

Should investors sell immediately? Or is it worth buying Fannie Mae?

This decision brings Fannie Mae's standards into alignment with fellow government-sponsored enterprise Freddie Mac, indicating a coordinated approach to expanding mortgage eligibility across the housing finance system. Although the policy objectives focus on greater financial inclusion, investors appear to be penalizing the company for the perceived increase in risk exposure.

Technical Indicators Flash Warning Signals

From a technical analysis perspective, Fannie Mae's stock is now emitting bearish signals. The shares are trading below key moving averages, suggesting potential for continued weakness in the near term. Market observers will monitor whether this downward trajectory persists or if stabilization occurs following Wednesday's aggressive decline.

The critical test for Fannie Mae's revised approach will come during the weekend of November 15-16, when the new credit assessment policy officially takes effect. This implementation period will reveal whether the company can successfully address investor apprehensions about its evolving risk profile.