Federal agencies on Wednesday took steps to bring newer credit scoring models into the mortgage underwriting process, marking a significant shift in how borrower risk is evaluated.
U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner announced the adoption of FICO 10T and VantageScore 4.0 for Federal Housing Administration (FHA) loans in the coming months, without providing more details.
“I want to emphasize that this will benefit only applicants, again, that are creditworthy and trustworthy; we’ve been through a great financial crisis,” Turner said Wednesday in a media conference. “So, this is the rigor, it will stay in place, but we want to make it more available and more affordable.”
Meanwhile, Federal Housing Finance Agency (FHFA) Director Bill Pulte announced a pilot program that will allow the use of VantageScore 4.0 exclusively for loans delivered to Fannie Mae and Freddie Mac, future use of FICO 10T and a new pricing grid that reflects the updated models. He also said the agency is in discussions with Fair Isaac Corp. (FICO) and VantageScore to reduce credit score costs to as low as 99 cents.
“We are happy to announce that, effective immediately, Fannie Mae and Freddie Mac are accessing new, modern credit scores that give American homebuyers the credit they deserve for paying their rent. If you pay on time, you are more likely to pay your mortgage on time for decades,” Pulte said.
Response to lender pleas
The Trump administration has been pressing for changes to mortgage credit scoring, citing lender complaints that costs have climbed sharply in recent years. Pulte said in July 2025 that the government-sponsored enterprises (GSEs) would accept VantageScore 4.0. For now, the GSEs are expected to continue using three-bureau “tri-merge” reports, even as some industry participants argue for a single-report approach.
Since the July announcement, lenders have been waiting for details on how VantageScore 4.0 loans will be delivered — changes that depend on updates to the GSEs’ pricing grids and technology platforms.
In a statement, VantageScore said that the changes can “significantly reduce costs for American consumers and mortgage lenders by as much as $1 billion in the first year of mortgage credit score competition.”
“This historic announcement by both FHFA and the FHA will result in modernization of the mortgage industry, delivering reduced mortgage risk, reduced costs for consumers and mortgage lenders, and enhanced mortgage access for creditworthy Americans,” said Silvio Tavares, president and CEO of VantageScore.
FICO sent a statement to HousingWire that also expressed support for the move.
“FICO supports FHFA’s announcement that the long-anticipated historical data for FICO Score 10T will be released to the mortgage market to enable industry evaluation as part of the agency’s credit score modernization efforts,” the statement read in part. “Broad access to this historical data will allow the mortgage ecosystem to independently evaluate score performance across portfolios and economic cycles.”
The company also reinforced remarks from Pulte and Turner about the evolution of the credit score market, noting that FICO 10T is available for free with the purchase of FICO Score Classic, and that FICO 10T via the FICO Mortgage Direct License Program is available for $0.99 and a funding fee of $65.
Pilot program underway
Pulte said Fannie Mae and Freddie Mac are ready to begin working with approved lenders to accept VantageScore 4.0. Lenders have already delivered roughly $10 million in such loans to Freddie as part of an initial operational test, with securitization expected soon. The nation’s 21 largest lenders are participating in the pilot, he added.
“Fannie and Freddie will also have new separate pricing guides for VantageScore loans to accurately reflect the way the different models work,” Pulte said, adding that the loan-level price adjustments (LLPAs) are already finished but the market should “stay tuned” for potential cuts.
Regarding the risks of allowing only one credit score model to be delivered, Pulte said this is “not rocket science.” And to the extent there was ever a public offering for the GSEs, “it would increase the likelihood of a successful IPO.”
During the limited rollout, approved lenders may choose between VantageScore 4.0 and Classic FICO scores using tri-merge credit reports. Lenders not participating must continue using Classic FICO scores from all three bureaus.
Similar implementation efforts are underway for FICO Score 10T, starting with the release of historical credit score data expected this summer.
Pressure on pricing
Pulte said the FHFA has pushed FICO to offer more competitive pricing. In October 2025, FICO introduced a direct program allowing resellers to generate and distribute scores themselves.
Under the traditional model, FICO charges resellers about $10 per score. In its newer “performance pricing” model, lenders pay a $4.95 royalty per score plus a $33 fee per borrower on funded loans — an approach aimed at lenders with high fallout rates.
“Right before we came up here today, I did get a phone call from the CEO of FICO,” Pulte said. “VantageScore was at about $5 per loan, and they went down to 99 cents alone … and FICO had taken their prices from $4.95 up to $10. And the FICO CEO has offered to, pending details of a FICO direct program, take the FICO score from $10 down to 99 cents with the success fee.”
Pulte said the agency’s focus may next turn to the credit bureaus, signaling broader scrutiny of mortgage-related costs: “We want people to make money, but we want people to be able to afford the American dream, and that means companies can’t rip off consumers anymore.”
Sarah Wolak contributed reporting to this story.