Homeownership in the United States has become increasingly difficult for millions of Americans. Mortgage rates remain elevated in the 6.3 to 6.5% range, and home prices are high in most major markets. On top of this, a significant segment of potential buyers have struggled to qualify for mortgages under decades-old scoring models. This group largely includes those with strong rent payment histories, but thin traditional credit files.
On Wednesday, Fannie Mae announced new guidance that intends to shift this dynamic. In an update to its Selling Guide, the mortgage giant revealed lenders can now use VantageScore 4.0, a credit scoring model that incorporates rent and utility payment history in mortgage origination decisions.
As Fannie Mae detailed in its official press release, this also opens the door to future use of FICO Score 10T, another newer model aimed at modernizing credit scores.
“Credit score model modernization is an important step toward a more competitive, innovative, and resilient housing finance system,” said Jake Williamson, Fannie Mae’s Executive Vice President and Head of Single-Family. “By incorporating newer models with more predictive power, we can support sustainable access to homeownership and keep safety, soundness, and operational readiness at the center.”
What Fannie Mae announced Wednesday
For Americans who have paid rent consistently but have limited traditional credit through credit cards or loans, Fannie Mae’s announcement could represent an unexpected shift in how mortgage lenders evaluate creditworthiness. Unlike what renters had become used to, this updated model relies on payment behavior most renters already demonstrate every month.
Traditional FICO credit scores, which have historically been required for Fannie Mae-backed mortgages, don’t factor in on-time rent payments. For a first-time homebuyer who has paid rent reliably for years but has limited credit card or loan history, that meant they could be denied or offered worse mortgage terms despite demonstrating financial responsibility through their largest monthly expense.
VantageScore 4.0 and FICO Score 10T both incorporate rent and utility payment history reported to the three major credit bureaus — Equifax, Experian, and TransUnion. The updated models also use what Fannie Mae describes as “trended credit data,” which analyzes how a borrower’s credit behavior changes over time rather than taking a single snapshot.
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As stated in Wednesday’s release, Fannie Mae is initially rolling the change out to a limited group of approved lenders before making it broadly available. Until VantageScore 4.0 is made widely available, Classic FICO scores are to continue being used by lenders not yet participating in the rollout.
“Together, these updates represent another step forward in the multi‑year effort to modernize credit scoring, strengthen risk management, and expand the tools available for lenders to responsibly evaluate borrower creditworthiness,” the release concluded.
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What the credit score shift could mean for homebuyers
The update addresses a structural gap that has kept many otherwise qualified renters from purchasing homes. According to the National Association of Realtors, the typical first-time homebuyer in the United States is now 40 years old. While several factors contribute to that figure, among them is how difficult it has become for younger Americans to build the credit profiles historically required for conventional mortgages.
Many of those prospective buyers pay rent on time every month but have what the credit industry calls ‘thin files,’ meaning limited credit card usage, no installment loans, or minimal borrowing history. Under traditional scoring models, that reliability doesn’t factor into credit decisions. That changes with the newer models Fannie Mae is now accepting.
The change may be particularly relevant for Americans with limited traditional credit histories, including long-term renters without significant consumer debt, younger workers who have delayed borrowing, and self-employed workers whose payment patterns don’t align with traditional credit scoring methods.
Whether and how those impacts materialize depends on implementation timing and individual lender practices. Fannie Mae’s announcement emphasizes that the rollout is limited to approved lenders initially, meaning broader availability will take time. Meanwhile, the underlying economics of the 2026 housing market, including elevated mortgage rates and high home prices, remain unchanged regardless of credit score methodology.
Key takeaways on the Fannie Mae credit score update
- Rent payment history can now factor into mortgage credit scoring: VantageScore 4.0, now accepted by Fannie Mae, incorporates on-time rent and utility payments into credit scores, a departure from how Classic FICO models calculate creditworthiness.
- The change affects one of the largest mortgage buyers in the U.S.: Fannie Mae is one of the federally controlled entities that, with Freddie Mac, provides roughly $8.5 trillion in funding for U.S. mortgage markets through institutions regulated by the Federal Housing Finance Agency.
- Implementation is rolling out gradually: The update is initially available through a limited group of approved lenders, with broader availability planned as the mortgage industry adopts the newer scoring models.
- Younger buyers and renters may be among those most affected: With the typical first-time buyer now around 40 years old, the inclusion of alternative credit data addresses a factor that has limited some creditworthy applicants who don’t fit traditional scoring profiles.
- Broader affordability conditions remain unchanged: Mortgage rates and home prices continue to shape the housing market regardless of credit scoring methodology, meaning the credit score update alters one input in the lending process while other market dynamics remain the same.
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