New Credit Scoring Option Approved—But Not Quite Ready for Takeoff

In a move that could broaden access to homeownership, the Federal Housing Finance Agency (FHFA) recently announced that VantageScore will soon be accepted as an additional credit scoring model for Fannie Mae and Freddie Mac loans. Secretary Sandra L. Thompson confirmed the green light, marking a significant shift from the long-standing reliance on FICO scores alone.

Why This Matters

The approval of VantageScore is welcome news for many would-be homebuyers—especially those with thin credit files or limited traditional credit history. Unlike the FICO model, which often requires a longer credit history to generate a score, VantageScore can evaluate alternative credit data and generate a score even with shorter histories. This could open the door for:

• Renters with limited credit cards or loans

• Recent immigrants or young adults with no FICO score

• Consumers recovering from financial setbacks who have rebuilt responsibly but still don’t score on the FICO model

Additionally, there’s hope that increased competition between credit scoring providers could help curb the sharp rise in credit report costs—an issue affecting lenders and borrowers alike.

The Catch: Systems Aren’t Ready Yet

While the FHFA has approved the use of VantageScore, major systems like Desktop Underwriter (DU) and Loan Product Advisor (LPA)—the automated underwriting engines for Fannie Mae and Freddie Mac—are still being updated to support this integration. In other words, the rulebook has changed, but the referees aren’t on the field yet.

This means that, for now, FICO remains the go-to model for determining eligibility for most conventional mortgages.

What’s Next?

The FHFA has outlined a multi-year implementation plan to ensure lenders, credit bureaus, and technology platforms have time to adapt. In the meantime, it’s a good reminder that the credit landscape is evolving—and that’s a win for future accessibility and fairness in mortgage lending.

We’ll continue to monitor developments closely and update you as implementation progresses. For now, prospective buyers should continue to monitor their FICO scores—but stay tuned for future options that may provide more flexibility.

Want to understand how your credit profile fits into today’s mortgage landscape?

Let’s talk. I’m happy to review your scenario and help you build a path toward homeownership.