Fannie Mae and Freddie Mac Expand Use of VantageScore 4.0 for Mortgages
The Federal Housing Finance Agency (FHFA) has expanded the use of VantageScore 4.0 in mortgage applications to all mortgages sold to Fannie Mae and Freddie Mac, government-sponsored enterprises that purchase and bundle home loans. This follows a limited rollout earlier this year involving about 50 lenders. The new credit scoring model considers alternative data like rent payments, potentially helping borrowers with thin credit histories qualify for mortgages or secure better interest rates. FHFA is also considering reducing the number of required credit reports from three to two — and possibly even one in the future — which could lower costs but raise concerns about missing critical information. Additionally, FICO 10T, another newer model using alternative data, may soon be approved for mortgage use by FHFA. The Federal Housing Administration will also begin insuring mortgages underwritten with VantageScore 4.0 and FICO 10T starting in January.
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Topics: Fannie Mae FHFA Freddie Mac mortgage VantageScore 4.0