WASHINGTON — Federal Housing Finance Agency Director Bill Pulte has directed Fannie Mae and Freddie Mac to approve the use of VantageScore by all lenders, immediately broadening access to the rival credit-scoring model in the conventional mortgage market.

Pulte announced the instruction Thursday, saying the government-sponsored enterprises’ initial implementation had been “incredibly successful,” with 50 lenders already delivering loans using VantageScore. “Effective immediately,” he wrote, Fannie Mae and Freddie Mac are to approve all lenders to use the score.

The move represents a potentially consequential escalation of the agencies’ shift away from the mortgage market’s historic reliance on FICO scores. It could give lenders more flexibility in the credit-scoring model used for loans sold to or guaranteed by the GSEs, while intensifying price, performance and compliance competition between the two score providers.

What the directive says

Pulte characterized the broader approval as the next step after an initial rollout involving 50 lenders. He also framed the action as a challenge to FICO’s longtime market position, writing that “FICO has enjoyed a monopoly. No more.”

Fannie Mae and Freddie Mac were created by Congress to support liquidity in the U.S. housing-finance market. Their underwriting standards carry major weight because lenders commonly originate mortgages intended for sale to, or securitization through, the enterprises.

Under the directive, lenders that had not participated in the initial VantageScore deployment are expected to be eligible to use VantageScore in their GSE mortgage deliveries. The announcement did not, however, detail implementation mechanics such as lender onboarding procedures, data-reporting requirements, pricing treatment, score-version parameters beyond the existing VantageScore 4.0 initiative, or whether lenders will be able to choose between scores on a loan-by-loan basis.

A larger break from FICO-only underwriting

The directive builds on the GSEs’ earlier announcement that they would accept mortgages evaluated using VantageScore 4.0, a competing model to FICO. The earlier development contributed to a decline in Fair Isaac’s share price in April, according to Reuters.

VantageScore 4.0 is designed to incorporate trended credit data, which considers patterns in consumers’ credit behavior over time rather than relying only on a single point-in-time account balance or payment-status snapshot. Supporters contend that trended data can provide more predictive insight into borrower behavior and potentially broaden the population that can be evaluated with a score.

For mortgage originators, the operational significance is likely to extend well beyond simply selecting a different score. Lenders, loan-origination-system providers, credit-reporting agencies, investors and quality-control teams will need to understand how VantageScore results align with existing underwriting overlays, automated underwriting systems, adverse-action processes, secondary-market execution and fair-lending monitoring.

Implications for lenders and consumers

The expanded approval could reshape several areas of the mortgage-credit ecosystem:

• Competition in credit scoring. FICO has long been central to GSE mortgage underwriting. A universal approval pathway for VantageScore creates a more meaningful competitive alternative for lenders.

• Potential cost pressure. Greater score-model competition could eventually affect the cost structure of mortgage credit reporting and scoring, although any pricing impact will depend on the enterprises’ implementation and the commercial terms offered to lenders.

• Underwriting and model governance. Lenders will need to validate policies, procedures and controls for using VantageScore, including score cutoffs, exception handling, audit trails and potential differences in borrower outcomes relative to FICO-based underwriting.

• Fair-lending scrutiny. A model’s ability to score more consumers does not eliminate compliance obligations. Lenders using newly available scoring options will need to monitor approval, pricing and servicing outcomes across protected classes and other relevant segments.

• Consumer access. If VantageScore allows some borrowers to be evaluated differently than under legacy scoring approaches, the change could benefit applicants with thinner or evolving credit files. But the practical effect will depend on each lender’s underwriting criteria and the GSEs’ detailed implementation rules.

Policy background

The move is tied to a longer-running federal effort to introduce more competition and modernization into the mortgage credit-score market. In 2018, President Donald Trump signed the Credit Score Competition Act, directing the housing-finance regulator to enable Fannie Mae and Freddie Mac to consider newer credit-score models for mortgage underwriting.

That policy debate has taken on greater significance as regulators, consumer advocates and industry participants focus on credit invisibility, thin-file consumers, credit-reporting costs and the use of alternative data. The broad availability of VantageScore at the GSEs could accelerate pressure on lenders and service providers to modernize systems that were built around FICO-centric mortgage workflows.

For collection agencies and creditors, the development is also worth watching. A mortgage-market endorsement of a competing score model could influence broader discussions around consumer credit access, data furnishing, dispute accuracy and the predictive value of repayment behavior. Credit-reporting data quality may become even more important as scoring competition drives closer attention to how tradeline information is reported, updated and interpreted.

What happens next

The key question is no longer whether VantageScore can be used in GSE-backed lending, but how rapidly lenders will adopt it and under what operational conditions. Market participants will be looking for formal implementation guidance from Fannie Mae, Freddie Mac and FHFA addressing delivery requirements, technology readiness, lender approval processes and any transition rules.

Pulte’s instruction is effective immediately, but immediate eligibility does not necessarily mean immediate widespread use. Mortgage lenders typically need time to update policies, vendor arrangements, automated underwriting configurations, compliance testing and internal training before deploying a new scoring option at scale.

Still, the announcement makes clear that federal housing-finance leadership intends to move quickly: VantageScore is no longer limited to a small initial lender group, and FICO’s longstanding dominance of the GSE mortgage channel now faces a direct, regulator-backed competitive challenge.