FHFA Updates Enterprise Credit Score Requirement Implementation

(Illustration courtesy of FHFA)

The Federal Housing Finance Agency on Thursday announced updates to the implementation of new credit score requirements for single-family loans acquired by Fannie Mae and Freddie Mac.

FHFA said it is aligning the implementation date of the bi-merge credit reporting requirement with the transition from the Classic FICO credit score model. This aligned transition is expected to occur in the fourth quarter of 2025.

“To better support market participants with this transition, the Enterprises will accelerate the publication of VantageScore 4.0 historical data, originally expected to be published in the first quarter of 2025, to early in the third quarter of 2024,” FHFA said in a statement. “FHFA and the Enterprises continue to work towards providing similar data to support the transition to the FICO 10T model, contingent upon achieving the necessary conditions for acquisition and publication of this data. FHFA will provide further details on implementation timing for FICO 10T once this process is complete.”

The Mortgage Bankers Association has noted the effort’s significant operational complexities.  

“MBA has advocated for a longer implementation timeline, and we appreciate FHFA taking our recommendations to heart,” MBA President and CEO Bob Broeksmit, CMB, said in September when FHFA first announced stakeholder forums designed to improve its implementation plan.

“We continue to support FHFA’s efforts to ensure better competition in the credit scoring space and will work with them to ensure unintended consequences are mitigated and that costs, complexity, consumer impact, and policy implications are taken into consideration,” Broeksmit said at the time.

In October 2022, FHFA announced approval of the FICO 10T and VantageScore 4.0 credit score models for use by the Enterprises as well as the transition to a bi-merge credit reporting requirement. Under a bi-merge approach, credit reports from two, rather than three, of the nationwide consumer reporting agencies may be used, which FHFA said should promote more robust market competition. In March 2023, FHFA and the Enterprises solicited input on this initiative and in September 2023 announced public stakeholder forums.