Fannie Mae and Freddie Mac have moved to place the Classic FICO credit score and VantageScore 4.0 on equal footing for mortgage pricing, a shift that could reshape which scoring models lenders choose when underwriting conventional loans sold to the enterprises.
What changed and when
Eligible conventional loans settled or issued on or after Oct. 1 are now priced using the same loan‑level price adjustments (LLPAs) whether a lender supplies a borrower’s Classic FICO score or a VantageScore 4.0, according to industry reporting. The move removes a prior wrinkle that required lenders to apply a 20‑point reduction to a borrower’s VantageScore for pricing.
The Federal Housing Finance Agency, which supervises Fannie Mae and Freddie Mac, directed the enterprises earlier this year to add VantageScore 4.0 alongside FICO models in their selling guides. FHFA Director Bill Pulte has since amplified criticism of FICO’s pricing for credit scores and pressed for alternatives in the mortgage market.
“Abusive monopolies will not be allowed to take advantage of consumers anywhere in the mortgage market,” Bill Pulte, director of the Federal Housing Finance Agency, wrote on X.
“Since 2020, FICO has increased the price per a person’s credit score by 1,800%. FICO has enjoyed a monopoly. No more,” Pulte wrote on X in September.
How lenders are responding
Fannie Mae data show that 37% of Desktop Underwriter (DU) applications in September included a VantageScore 4.0. That participation level suggests many originators are already experimenting with VantageScore for loan delivery decisions and pricing.
Industry participants say the two scoring systems can produce materially different numeric scores for the same borrower. One wholesale lender executive reported cases where a borrower’s Classic FICO was 642 while the borrower’s VantageScore measured 708, a gap large enough to change the applicable LLPA and potentially affect a borrower’s interest rate or fees.
Rules lenders must follow
Under the new approach, mortgage originators that request VantageScore 4.0 for pricing must obtain the score from all three credit repositories—Experian, Equifax and TransUnion—rather than relying on a single bureau. The enterprises also directed lenders to use the same pricing grid for both score families to avoid two separate price schedules.
| Fact | Detail |
|---|---|
| Effective date for single pricing grid | Oct. 1 |
| Share of DU applications with VantageScore (September) | 37% |
| VantageScore requirement | Request scores from all three credit bureaus |
Implications for borrowers and lenders
For lenders, the change reduces a structural disadvantage that had made some originators reluctant to rely on VantageScore for pricing. If VantageScore produces higher numeric scores for some borrowers, lenders that adopt it may see fewer LLPAs on those loans, which can lower pricing or improve loan competitiveness.
For borrowers, the practical effect will vary by individual credit files and by which score a lender elects to use. Because Classic FICO and VantageScore use different scorecards and inputs, the same borrower can receive different numeric scores depending on the model, and that difference can affect a loan’s pricing tier under the enterprises’ LLPA schedules.
FHFA’s public criticism of FICO centers on the cost of score access. Director Pulte has framed the enterprises’ adoption of VantageScore as part of an effort to reduce market concentration and to give lenders and consumers alternatives to a single dominant scoring vendor.
- Fannie and Freddie now price eligible conventional loans the same whether supplied with Classic FICO or VantageScore 4.0.
- Lenders choosing VantageScore must request scores from all three major credit repositories.
- FHFA Director Bill Pulte has publicly criticized FICO’s pricing and said monopolistic practices won’t be tolerated in the mortgage market.
The enterprises’ guidance and FHFA statements signal a notable shift in the institutional balance between scoring models in the mortgage channel. How quickly lenders move to change ordering and underwriting workflows will depend on vendor integrations, investor overlays and lender risk appetite.
