The Federal Housing Finance Agency (FHFA) announced that it has approved use of two alternative credit score models by Fannie Mae and Freddie Mac. That could open more doors to potential homeowners who haven't established enough of a credit history for a traditional check.
"FHFA expects that implementation of FICO 10T and VantageScore 4.0 will be a multiyear effort," the agency wrote. "Once implemented, lenders will be required to deliver both FICO 10T and VantageScore 4.0 credit scores with each loan sold to the Enterprises. FHFA and the Enterprises will conduct outreach to stakeholders to ensure a smooth transition to the newer credit score models."
Fannie Mae and Freddie Mac have used FICO scores for the last two decades. The change has been in the works for years by the lenders and the FHFA to implement Section 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act.
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