According to HousingWire, the Federal Housing Finance Agency has made a significant move in how mortgages will be priced going forward. FHFA Director Bill Pulte announced that Fannie Mae and Freddie Mac will now use a single pricing grid for loans evaluated using either Classic FICO scores or VantageScore 4.0. This represents a consolidation of what were previously separate pricing systems, and Pulte indicated that maintaining two different grids no longer made practical sense.
This decision builds on an earlier announcement from September that allowed lenders to choose between Classic FICO and VantageScore 4.0 for conventional loans. However, that initial framework included a 20-point downward adjustment applied to VantageScore results to account for differences between the scoring models. The new unified pricing grid eliminates that adjustment entirely, which could meaningfully change how borrowers are priced based on which scoring model is used.
The change doesn't remove Classic FICO from the mortgage process altogether. Traditional FICO scoring remains required for loans that are manually underwritten, and there's still another FICO variant, FICO 10T, that hasn't yet been approved for use with Fannie and Freddie, though the FHA is planning to adopt it for underwriting starting in January 2027. What makes this interesting is that VantageScore 4.0 has historically produced higher scores than Classic FICO for the same borrowers, so putting them on the same pricing grid creates some complexity around how that difference will play out in the market.
Industry players see potential benefits for borrowers. According to HousingWire, VantageScore representatives expect nearly a billion dollars in consumer savings over the next year from this change. Rocket Mortgage has already announced it will use VantageScore 4.0 as its preferred scoring model, and the company reported that after testing both models on over a million credit reports, VantageScore helped some borrowers qualify for mortgages who might not have otherwise, with some borrowers saving an average of sixteen hundred dollars at closing. United Wholesale Mortgage found that about a quarter of its borrowers see better results with VantageScore, with that percentage potentially reaching forty percent by late September.
What I am seeing locally in the Bay Area and East Bay is that anything that expands credit options and potentially lowers costs for borrowers is welcome news. Our market has been adjusting to higher rates and cooling prices, and tools that help qualified buyers access better pricing or overcome credit challenges can only help our inventory and transaction volume. Whether VantageScore produces the widespread savings the industry is projecting remains to be seen, but the increased competition and choice is the kind of change that typically works in consumers' favor over time.
