On April 22, the FHFA and HUD jointly announced that the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, will begin accepting mortgage loans assessed using new credit score models — VantageScore 4.0 and FICO Score 10T — and that the FHA will also permit their use for FHA-insured mortgage underwriting. This marks the first new credit score models approved by the GSEs and FHA in decades. The action advances the implementation of the Credit Score Competition Act of 2018, which directs the FHFA to establish a process for the GSEs to validate and approve additional credit score models. According to Fannie Mae’s announcement, the newer models incorporate additional data such as on-time rent payment history and trended credit data, and have the potential to score more consumers accurately. The changes are intended to modernize credit evaluation, expand access to homeownership, lower costs in mortgage origination, and introduce competition into the credit scoring market.

Fannie Mae and Freddie Mac each issued guidance announcing the addition of VantageScore 4.0 and FICO Score 10T as approved credit score models under their respective selling and seller/servicer guides. VantageScore 4.0 is available immediately to approved lenders through a limited rollout, while FICO Score 10T implementation will follow at a later date, according to the announcement. During the limited rollout, approved lenders may choose between VantageScore 4.0 and Classic FICO through a tri-merge credit report, but the agencies noted that lenders not participating must continue to use Classic FICO. Both GSEs plan to publish historical credit score data for the new models beginning this summer.