New Credit Models Could Bring in More Buyers
Updated scoring models will allow government-backed loan programs to consider additional data in underwriting, including rent and utility payment history.
WASHINGTON — Federal housing officials on Wednesday announced a major overhaul of mortgage credit scoring that could expand access to home loans and change how borrowers are evaluated.
The Federal Housing Finance Agency (FHFA) and the U.S. Department of Housing and Urban Development (HUD) said government-backed loan programs will allow lenders to use both VantageScore 4.0 and FICO Score 10T when evaluating borrowers for mortgages backed by Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA).
The updated models incorporate credit data and alternative financial information, such as rent and utility payment history, which officials say can better capture a borrower’s financial behavior over time.
For real estate professionals, the shift could expand the pool of qualified buyers, give agents new ways to discuss financing and potentially increase transaction activity as more borrowers meet loan standards.
Officials said the move is intended to modernize underwriting and introduce competition into a system long dominated by older credit models.
“By embracing additional predictive credit scoring models, we are taking a meaningful step toward expanding access to homeownership,” HUD Secretary Scott Turner said in a statement.
The FHFA said Fannie Mae and Freddie Mac will immediately begin accepting loans scored with VantageScore 4.0, while also moving toward broader use of FICO 10T. The FHA will also permit both models for insured loans in the coming months.
Industry estimates suggest the transition could reduce costs for lenders and consumers by up to $1 billion in the first year, while potentially qualifying more borrowers who may have been overlooked under older scoring systems.
The move advances implementation of the 2018 Credit Score Competition Act, aimed at increasing flexibility and reducing reliance on a single scoring method in the mortgage market.
More than 80% of FHA-insured loans go to first-time buyers, underscoring the potential reach of the changes as agencies look to broaden participation in the housing market.
© 2026 Florida Realtors®