FHA accepts VantageScore 4.0 and FICO 10T as credit score models
Lenders utilizing Federal Housing Administration programs face documentation questions following Mortgagee Letter 2026-11, published by the Federal Housing Administration to formalize VantageScore 4.0 and FICO Score 10T as acceptable credit score models alongside Classic FICO.
Effective Date and Credit Score Model Selection Rules
The guidance becomes effective for case numbers assigned on or after January 1, 2027. Mortgagees may submit one or more credit score model types, provided lenders use the same model type for all co-borrowers on the transaction. When multiple score models are submitted, the borrower’s final score becomes the lowest score among the submitted models, according to JD Supra.
Baker Donelson reported that the Federal Housing Administration updated its FAQs on October 8, 2026. Unlike enterprise models, the Federal Housing Administration does not adjust minimum credit scores based on the selected model, meaning no VantageScore haircut applies to the loan-level price adjustment grids.
Today, @SecretaryTurner announced that the Federal Housing Administration will permit the use of VantageScore 4.0 and FICO 10T as eligible credit scoring models for FHA-insured mortgage underwriting.This historic move is intended to lower costs for the American people after… pic.twitter.com/xsAmvdl68D
Lenders must retain credit reports in case binders
The Mortgagee Letter requires lenders to retain credit reports in the case binder that include all credit score model types submitted in the final TOTAL submission. The retained report may also include additional credit score model types that were not submitted to TOTAL. JD Supra noted that if VantageScore 4.0 and FICO 10T are submitted, the retained report must include both models but may also contain Classic FICO.
This structure creates an unresolved documentation question for lenders practicing loan-by-loan model selection. Consider a lender reviewing credit reports showing a Classic FICO of 572, a FICO 10T of 579, and a VantageScore 4.0 of 604. Selecting the VantageScore of 604 allows the borrower to qualify for maximum financing rather than a 90 percent loan-to-value cap.
While the Federal Housing Administration permits unsubmitted scores to remain in the retained credit report, federal reviewers may see them after endorsement. It remains unclear what legal or practical significance unsubmitted scores carry once a loan receives endorsement, leaving lenders to weigh operational documentation standards carefully.
What credit score models does Mortgagee Letter 2026-11 authorize?
What specific credit score models does Mortgagee Letter 2026-11 authorize?
The Federal Housing Administration authorized VantageScore 4.0 and FICO Score 10T as acceptable credit score models alongside Classic FICO, taking effect for case numbers assigned on or after January 1, 2027.
FHA released a preparedness guide, instructing lenders on how to use alternative credit scores. The guide affirmed that FHA’s tri-merge credit report requirement is unchanged, and that minimum decision credit scores apply to the alternative models. https://t.co/Je7pQOIOj1
How does the Federal Housing Administration handle transactions with multiple co-borrowers?
The agency requires lenders to use the exact same credit score model type for all co-borrowers involved in a single transaction when submitting data.
What happens when a lender submits multiple credit score models to TOTAL?
When multiple score models are submitted, the borrower’s final score becomes the lowest score among all the submitted models.
What documentation must lenders keep in the case binder regarding unsubmitted scores?
The retained credit report must include all credit score model types submitted in the final TOTAL submission, and it may also include additional unsubmitted credit score model types.