The FHFA announced that it will implement a framework for adopting two new credit scoring models by Fannie Mae and Freddie Mac. The framework will likely take several years to fully implement.

Fannie Mae and Freddie Mac have relied on "Classic" FICO for two decades, but the model is based on modeling techniques from the 1990s and limited data.

The new scores, FICO 10T and VantageScore v4, utilized current modeling techniques and data such as rents, utilities, and telecom. NAR has advocated for the adoption of new scores in recent years to spur competition and improvements and for the adoption of alternative credit data like rent for nearly three decades.

This change will allow significantly more home buyers to be credit scorable and help build the ladder to home ownership for under served groups.

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Ken Fears

Ken Fears is the Senior Policy Representative for Banks, Lending, and Housing Finance for the National Association of REALTORS®.

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