FHA, Fannie Mae and Freddie Mac Announce Authorization for New Credit Scoring Models

FHA, in coordination with FHFA, has announced authorization for the use of VantageScore 4.0 and FICO Score 10T for FHA-insured loans. Contemporaneously, Fannie Mae and Freddie Mac have announced that each company will begin accepting mortgage loans in a rollout for a group of approved, participating lenders using VantageScore 4.0 with similar implementation efforts underway for FICO Score 10T in the near future.  

This transition is designed to foster greater competition in the mortgage market and reduce costs for prospective homebuyers. According to federal officials, these new scoring models are particularly beneficial for borrowers with responsible payment histories, such as those with consistent rent payments, who may now qualify for mortgages more easily.

Lenders interested in participating in the Fannie Mae and/or Freddie Mac limited rollout of VantageScore 4.0 should contact their account manager or representative.  Lenders who are not participants in this initial rollout must continue using the “Classic FICO” model for their Fannie Mae or Freddie Mac loans.