Fannie Mae, Freddie Mac Expand VantageScore 4.0 Use

Fannie Mae and Freddie Mac have expanded a pilot program to allow lenders to use VantageScore 4.0 — which factors in rent and trended payment data — alongside classic FICO scores for all mortgages sold to the GSEs. FHFA is also weighing cutting the required tri-merge credit report pulls to two or even one, while FICO 10T is expected to gain approval and FHA will insure mortgages using both new scoring models starting January 1.

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The shift ends FICO's decades-long exclusive role in GSE mortgage underwriting, opening the door for VantageScore 4.0 — jointly owned by Equifax, Experian and TransUnion — to compete directly in a market covering the bulk of U.S. mortgage volume. Fair Isaac Corp faces a structural threat to a high-margin, near-monopoly revenue stream tied to mortgage credit scoring, while the three credit bureaus gain a new growth vector as VantageScore adoption scales. If FHFA also reduces required credit pulls from three to two or one, bureaus could see reduced report volume and revenue per mortgage even as scoring diversifies. For homebuyers, alternative data such as rent and trended card usage could expand mortgage access for thin-file borrowers, a modest tailwind for mortgage origination volumes at lenders and GSEs. The changes are incremental but signal a broader loosening of legacy credit-scoring infrastructure that has underpinned U.S. mortgage underwriting for decades.