Fannie, Freddie Credit Score and Credit Report Requirements to Change

The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the GSEs) eventually will require two credit scores for each loan, and announced a future change to the tri-merge credit report requirement.  The transition to these new, planned requirements is not immediate and may take multiple years. 

Credit Scores

FHFA announced it had validated and approved both the FICO 10T and VantageScore 4.0 models for the GSEs.  When fully implemented, the GSEs will require both a FICO 10T and VantageScore 4.0 credit score instead of the traditional FICO score.  This change is expected to increase the accuracy of borrower’s credit scores, allow more equitable and inclusive access to mortgage credit by increasing the variety of credit history sources (i.e. utility and cell phone payments), and increase the soundness of the housing market.

Credit Reports

Also, FHFA announced its intention for the GSEs to require only two consumer reporting agency credit reports in the future, instead of the current requirement for three credit reports – Equifax, Experian, and TransUnion.  FHFA expects this change will cut costs and increase innovation in the industry.