FHFA Announces Framework to Adopt New FICO and VantageScore Scores

October 25, 2022

Fannie Mae & Freddie Mac (GSEs), Credit Policy

By: Ken Fears (National Association of REALTORS®)

The FHFA announced(link is external) that it will implement a framework for adopting two new credit scoring models by Fannie Mae and Freddie Mac. The framework will likely take several years to fully implement.

Fannie Mae and Freddie Mac have relied on “Classic” FICO for two decades, but the model is based on modeling techniques from the 1990s and limited data.

The new scores, FICO 10T and VantageScore v4, utilized current modeling techniques and data such as rents, utilities, and telecom. NAR has advocated for the adoption of new scores in recent years to spur competition and improvements and for the adoption of alternative credit data like rent for nearly three decades.

This change will allow significantly more home buyers to be credit scorable and help build the ladder to home ownership for under served groups.

Published by Angie Hedgepeth

Angie Hedgepeth, Government Affairs Director for the Association, attends all the local meetings each month, as well as NAR and NCAR meetings, and keeps members abreast of the multiple issues being addressed in local, state and national government. She prepares reports on the meetings she attends and they are included in the weekly "Government Affairs Update". View more posts