New Mortgage Credit Models
Federal Regulators Expand VantageScore Use Across US Mortgage Lending to Increase Competition
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Federal housing regulators have expanded VantageScore 4.0 as an alternative to Classic FICO for eligible mortgages sold to Fannie Mae and Freddie Mac, allowing approved lenders to choose a model without seeking prior approval; lenders must use the same model for all borrowers on an individual loan. The shift is intended to increase competition and give lenders a broader view of borrowers, since VantageScore incorporates trended credit data and on-time rent payments, which may help some consumers with limited credit histories qualify. TransUnion is extending its 99-cent pricing for VantageScore 4.0 through the end of 2028, while Rocket Mortgage plans to make it its preferred model for eligible loans beginning in the fourth quarter of 2026, citing testing that found more borrowers could qualify at lower scoring costs. United Wholesale Mortgage has also reported that some borrowers receive more favorable results under VantageScore, including potential savings on loan pricing and mortgage insurance, though outcomes vary by borrower. Classic FICO remains an approved option, and regulators have not announced a retirement date for it.
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FHFA Director Bill Pulte said Fannie Mae and Freddie Mac now use one pricing grid for VantageScore and Classic FICO, ending the 20-point score reduction previously applied to VantageScore-backed loans.
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UWM said roughly 25% of its borrowers were already receiving a more advantageous result with VantageScore than with Classic FICO, and that the share could rise to 40% by the end of September.
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UWM CEO Mat Ishbia described a borrower whose VantageScore improved loan pricing by three-eighths of a percentage point and reduced monthly mortgage-insurance costs by more than $100, even after a 20-point adjustment to the score.
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FICO Score 10T is not yet eligible for loans delivered to Fannie Mae and Freddie Mac. Separately, the FHA was expected to make VantageScore 4.0 and FICO 10T available for FHA loans in January, alongside Classic FICO.
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TransUnion said it will continue to provide historical data and analytical support at no cost to help lenders and investors test and evaluate VantageScore 4.0.
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