When Federal Housing Finance Agency Director William Pulte took to social media to announce that Fannie Mae and Freddie Mac would immediately allow lenders to use VantageScore 4.0—without requiring new infrastructure—the housing industry took notice. The move, designed to increase competition in the credit score ecosystem, was intended to lower costs for consumers and expand access to homeownership, according to Pulte’s statement on X.
The new VantageScore 4.0 credit model broadens the scope of data considered in credit decisions, potentially raising the scores of millions who previously had little or no traditional credit profile. This expansion has sparked debate. Yield Pro reported concerns that the change could shift demand away from multifamily rentals, as more individuals might now qualify to purchase homes. Meanwhile, The Wall Street Journal’s editorial board warned that the move could result in higher mortgage default rates.
Yet, these anxieties may be exaggerated when weighed against the broader realities of the housing market. As Experian explains, credit scores are designed to “predict the likelihood that a person will fall at least 90 days behind on a bill within the next 24 months.” While FICO remains the oldest credit scoring model, VantageScore has been part of the landscape since 2006, and periodic updates to these models are routine.
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Fannie Mae and Freddie Mac have long relied on credit scores to determine mortgage eligibility. In 2022, the FHFA, under the Biden administration, validated both the FICO 10T and VantageScore 4.0 models for use by the government-sponsored enterprises, a move that was expected to take several years to implement. Initially, the FHFA planned to transition from a tri-merge credit report—which pulls data from all three major credit bureaus, Experian, Equifax, and TransUnion—to a bi-merge approach using only two. However, Pulte clarified that the process remains tri-merge, and both VantageScore 4.0 and FICO 10T will continue to draw from all three bureaus while also incorporating 24 months of trending data for a more comprehensive view.
The fears of a mass exodus from rentals or a spike in defaults hinge on the assumption that a large number of renters will suddenly be able to buy homes. Those in the multifamily sector who worry about losing tenants may be overlooking two key points. First, the transition from renting to owning is a constant in the housing market. Second, recent years have seen this pathway obstructed by rising interest rates and high home prices.
These very obstacles have allowed multifamily landlords to regain pricing power. Although the median sales price of new homes has dipped from its October 2022 peak of $460,300, it remained at $426,600 in May 2025, according to the U.S. Census Bureau and HUD. For context, the median price in May 2019 was $312,700, underscoring how fewer renters today can afford to buy a home.
“Let’s be real: credit scores are not the bottleneck,” Eric Croak, president of Toledo-based wealth advisory firm Croak Capital, told GlobeSt.com. “It’s home prices and borrowing costs. A renter with a 660 [credit score] might jump to a 700 under Vantage, but that does not make a $2,600 monthly payment on a $400,000 home magically affordable. So yes, some might qualify who did not before, but ‘qualify’ doesn’t mean ‘can realistically afford it." Croak added that a sudden, significant decrease in rental demand seems unlikely.
The Wall Street Journal’s editorial board took a skeptical view, writing, “The Biden Administration took steps to enable less credit-worthy borrowers to qualify for mortgages to support the housing market. Now the Trump team is doing the same in the name of boosting home ownership and lowering costs for borrowers. Taxpayers, look out.”
Croak, however, described the change as “basically a data upgrade,” noting that VantageScore 4.0 incorporates trending data such as utility bills and rent payments. “In reality, that rewrites who can cross the 620 or 660 approval line for a mortgage. For those on the bubble, this is not small change. Will this unlock a surge in renters becoming buyers? Nope,” he told GlobeSt.com.
Despite the expanded data sources, the process still relies on input from all three major credit bureaus, none of which has an incentive to provide unreliable credit data. The consensus among industry experts appears to be that while VantageScore 4.0 will open doors for some, the fundamental barriers to homeownership—high prices and borrowing costs—remain firmly in place.
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