The Federal Housing Administration (FHA) will begin insuring mortgages underwritten with VantageScore 4.0 (V4) and FICO 10T (10T) beginning Jan 1., 2027, according to recent announcements from the Department of Housing and Urban Development (HUD) and the credit scoring companies.

If successful, the final adoption of alternative credit scoring models for government-backed loans would mark the culmination of a yearslong process to modernize credit scoring in the mortgage industry.

“We thank Secretary of Housing and Urban Development Scott Turner and acting FHA Director and Ginnie Mae President Joseph Gormley for opening up another opportunity to expand access to affordable housing for all creditworthy Americans,” said Tony Hutchinson, head of public affairs at VantageScore, in a press release following HUD’s announcement.

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In making the announcement last Thursday, HUD also published a preparedness guide for lenders and investors adjusting their operations to accommodate the alternative credit scores.

Fair Issac. Corp. (“FICO”) also welcomed the official implementation date in a Friday press release, saying that inclusion of its modernized credit score for government-insured loans will help consumers “gain access to more favorable mortgage terms and sustainable homeownership.”

“FHA’s announcement provides valuable clarity for the industry and allows stakeholders to continue preparing for implementation in a thoughtful and deliberate manner,” said Julie May, general manager of business-to-business scores at FICO.

VantageScore was jointly launched in 2006 by the three national credit bureaus — Equifax, Experian and TransUnion — to compete with the classic FICO credit score.

Since President Donald Trump signed the Credit Score Competition Act back in 2018, federal regulators and industry partners have sought to reduce what critics describe as FICO’s monopolistic grip on the credit scoring industry. Those efforts have centered on fast-tracking VantageScore adoption to spur innovation and pricing competition.

FICO 10T, however, is FICO’s response to VantageScore’s updated models, which incorporate trended consumer credit data as well as new tradelines like rent-payment histories. In general, both sets of modernized scores are touted as more accurate predictors of modern consumers’ creditworthiness.

HUD first announced that final adoption of VantageScore 4.0 and FICO 10T for FHA underwriting was approaching during an April press conference, though implementation dates have remained uncertain over the ensuing months.

Standing beside HUD Secretary Scott Turner at that April press conference, Federal Housing Finance Agency Director Bull Pulte — who also chairs Fannie Mae and Freddie Mac’s respective boards — announced a limited pilot program for VantageScore for Fannie- and Freddie-eligible loans.

Now, HUD’s announcement of a Jan. 1, 2027, implementation date for alternative credit scores comes as VantageScore adoption is heating up on the conventional side of the market.

Through a series of social media posts last week, Pulte instructed Fannie and Freddie to expand VantageScore eligibility to all lenders, including for all Fannie- and Freddie-securitized products and credit risk transfers.

An important caveat is that classic FICO scores must still accompany loans delivered to Fannie and Freddie. HUD did not specify in its announcement whether lenders would have to submit classic FICO scores alongside VantageScore or 10T scores in January.

HUD did not return a request for comment by time of publication.

Adoption of FICO 10T has lagged VantageScore, with Fannie and Freddie just releasing historical 10T data for their counterparties to review as of July.