Two borrowers on a Fannie Mae loan have representative credit scores of 742 and 693. Which score is the loan's representative credit score for pricing?
Correct Answer
B) 693, the lower of the borrowers' representative scores
B. The loan-level representative credit score for pricing is 693. Each borrower's applicable score has already been supplied. For multiple borrowers, select the lowest applicable individual score: min(742, 693) = 693. Scope and exceptions: Certain manual-underwriting eligibility tests use average median scores; do not substitute that method for pricing. This score alone does not determine the final rate, fees or approval. Individual score selection and loan-level score selection are separate steps. Source: Representative Credit Score; Average Median Credit Score — https://selling-guide.fanniemae.com/sel/b3-5.1-02/determining-credit-score-mortgage-loan
Why This Is the Correct Answer
B. The loan-level representative credit score for pricing is 693. Each borrower's applicable score has already been supplied. For multiple borrowers, select the lowest applicable individual score: min(742, 693) = 693. Scope and exceptions: Certain manual-underwriting eligibility tests use average median scores; do not substitute that method for pricing. This score alone does not determine the final rate, fees or approval. Individual score selection and loan-level score selection are separate steps.
Why the Other Options Are Wrong
Option A: 718, their average rounded up to a whole number
Averaging is not the stated pricing method.
Option C: The primary wage earner's score, regardless of which is lower
Income contribution does not replace the score-selection rule.
Option D: 742, the higher of the borrowers' representative scores
The rule does not select the strongest borrower's score.
Exam Tip
Determine the purpose of the credit score before choosing the calculation.
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