Mortgage
Fannie and Freddie Now Accept VantageScore 4.0, Opening a New Path for First-Time Buyers
By Real Estate Wire Staff, . Real Estate Wire.
A new credit scoring option is now available to every lender selling loans to Fannie Mae and Freddie Mac, and it could change who qualifies for a mortgage.
The Federal Housing Finance Agency (FHFA), which oversees the two government-sponsored enterprises, expanded access to VantageScore 4.0 on September 9, 2026, removing a prior requirement for written approval before lenders could use it, according to FHFA's published policy. HousingWire confirmed that sellers can now choose between Classic FICO and VantageScore 4.0 when originating single-family loans.
What VantageScore 4.0 actually is
VantageScore 4.0 is a credit scoring model that competes with FICO, the system that has dominated mortgage lending for decades. The key difference is how each model assesses credit history. VantageScore 4.0 incorporates alternative data, which can produce a usable score for borrowers who have limited traditional credit activity, such as first-time buyers who have never carried a credit card balance or an auto loan.
Inman reported that the National Association of Realtors praised the FHFA move, with Inman noting that a credit score built on alternative data has never before been available across the broad housing finance system. The Credit Score Competition Act, signed into law in 2018, required FHFA to establish a validation process for the enterprises to consider alternatives to FICO, and the July 2025 interim transition policy was the first formal step toward that.
Why scores may look different
Early data from lenders already using the model suggests the gap between the two systems can be meaningful. Rocket, which began running credit checks through VantageScore 4.0 in the spring, told Real Estate News that on mortgages originated under the new model, scores averaged around 11 points higher than under Classic FICO.
A higher score does not automatically mean a better loan or a lower rate, but it can mean the difference between qualifying and not qualifying, particularly for buyers near a lender's minimum threshold.
Why adoption will be slow
Melissa Cohn, regional vice president at William Raveis Mortgage, told Real Estate News that lenders will not move quickly. "People have to get comfortable with it. They need to have a history with it," she said.
The hesitation is practical. Lenders worry about what happens when a loan secured with a VantageScore 4.0 score is later sold into the secondary market. Whether that loan carries the same risk profile as one underwritten with FICO is a question the industry has not yet answered with enough data to feel confident. Underwriting decisions carry liability, and lenders tend to move only as fast as their risk models allow.
What to watch
The policy change is real, but the market effect will lag. Lenders need time to update their systems, train underwriters, and build a track record with the new model before it becomes a default option rather than an experiment. First-time buyers and those with non-traditional credit histories stand to benefit most if adoption accelerates, but the timeline depends on how quickly lenders accumulate enough loan performance data to feel confident in the scores.
What the current reporting does not establish is how many lenders have already activated VantageScore 4.0 access, or what share of originations are being run through it. Those figures, when they emerge, will be the real measure of whether this policy change reshapes who gets a mortgage.
Sources
1. What to know about VantageScore 4.0, the alternative to FICO, realestatenews.com
2. Credit Scores, fhfa.gov
3. GSEs open VantageScore 4.0 to all single-family lenders, housingwire.com
4. NAR Praises FHFA Move On VantageScore 4.0 Credit Score, inman.com
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