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Fannie Mae and Freddie Mac allow VantageScore 4.0 for eligible loans

Fannie Mae expanded the option to all of its approved lenders in September, giving more borrowers an alternative to Classic FICO when applying for a mortgage.

Reported · Written up by our desk · Mortgages

HousingWire reports that Fannie Mae and Freddie Mac are letting mortgage lenders use VantageScore 4.0 as an alternative to Classic FICO for eligible loans, expanding the credit-scoring models available in the mortgage process.

The change comes after the Federal Housing Finance Agency approved newer credit-scoring models, and VantageScore 4.0 can now be used alongside Classic FICO for some borrowers.

HousingWire notes that the two systems may assess borrowers differently, which could affect qualification and the cost of a mortgage for certain applicants.

Fannie Mae expanded the VantageScore 4.0 option to all approved lenders in September, the outlet adds, describing the difference as similar to two appraisers reviewing the same property.

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