Federal Housing Finance Agency (FHFA) Director William Pulte said on Wednesday that Fannie Mae and Freddie Mac will begin accepting additional credit-scoring models that incorporate nontraditional payment data such as rent and utilities. The FHFA move adds VantageScore 4.0 - a model that uses expanded data and analytics - to the suite of scores the two government-backed firms will accept when underwriting mortgages they guarantee.
Pulte said the agencies are also working to implement a similarly modified version of the FICO score, though that option is not yet in use. FHFA previously approved the use of those models in 2022, and Wednesday’s announcement formalizes that the scores are being incorporated into the guarantee process for Fannie and Freddie.
Broader adoption by HUD
Housing and Urban Development Secretary Scott Turner said his department would consider those expanded credit scores for mortgages underwritten by the Federal Housing Administration. HUD’s consideration extends the potential reach of the models beyond the government-sponsored enterprises to FHA-insured loans.
"We are modernizing credit scoring with more predictive models, helping millions of Americans who responsibly pay rent qualify for mortgages. That’s fair, it’s commonsense, and it’s finally delivering the benefits of competition to homebuyers nationwide,"
Pulte said in a statement that the change is designed to help prospective borrowers who have been disadvantaged under traditional scoring systems.
Officials' rationale and political context
Officials said expanding the use of alternative credit-score models should spur competition among scoring providers and could help lower mortgage costs, thereby creating opportunities for would-be homebuyers who otherwise might not qualify for affordable mortgages. The announcement comes as the Trump administration has placed renewed emphasis on housing affordability in recent months - a focus that officials framed in the context of broader concerns about rising costs ahead of the November midterm elections, when the administration’s party will defend narrow congressional majorities.
Implementation status
While VantageScore 4.0 is now being accepted in the guarantee workflow, FHFA officials indicated work continues on adopting a modified FICO option. HUD has not yet committed to full adoption and will evaluate the models for FHA underwriting.
The change represents a regulatory step intended to extend the credit box for mortgage applicants, using alternative data to identify creditworthy borrowers who may lack traditional credit histories.