This Week’s Big News for Deed Seekers: Fannie and Freddie Shift to VantageScore® in Loan Decisions

The price of stock in Fair Isaac, a.k.a. FICO®, just tanked. It happened after the Federal Housing Finance Agency (FHFA) director announced a change in the way Fannie Mae and Freddie Mac will consider an applicant’s credit scores. (The FHFA oversees Fannie and Freddie.)

Fair Isaac stock plummeted more than 25% on the last Tuesday in September 2026—the day after FHFA’s Bill Pulte announced that mortgage giants Fannie Mae and Freddie Mac would integrate VantageScore®, a FICO competitor. It was the worst day in FICO stock history since 1989.

What Bill Pulte Just Said—With Kudos From Rocket Mortgage  

This is about “VantageScore joining the existing FICO Classic pricing grid” used to assess interest rates, Pulte said on social media. Pulte said the move will simplify mortgage pricing, and that lenders and borrowers asked for this change.

Among FICO’s shareholders, the panic was unmistakable. Investors seem sure this change is a very big deal. Fannie and Freddie back the conventional mortgage loans that seven in every ten borrowers seek out. For decades, Fannie and Freddie relied on FICO.

Detroit-based Rocket Mortgage, the largest U.S. mortgage lender, chimed in to say it’s now embracing VantageScore, calling the move beneficial for healthy competition. Rocket claims this move “can lower costs and expand responsible access to homeownership.”

Maybe Rocket saw the writing on the wall.

Rocket reports having examined 1.4 million credit reports using the two different scoring systems. The company says it carried out a study that resulted in the selection of VantageScore 4.0. Rocket says the shift will allow more customers to gain access to mortgages. The company also says VantageScore helped some customers save money at closing.

In any case, Rocket’s announcement makes the company the first to make VantageScore its default. VantageScore could now see increased adoption across the industry.

Before this week, lenders had an incentive to use FICO. And they had good reason to skip over VantageScore. Lenders had to charge higher loan rates when VantageScore was used in loans for Fannie and Freddie. But now, the pricing system that made FICO scores standard for most mortgage borrowers has suddenly been replaced.

Advantaged by Vantage: More Deed Seekers May Qualify

Ashish Sabadra, a financial analyst at RBC, notes that the move might help hopeful borrowers who were previously locked out by FICO’s standards. The new system will allow lenders to choose between scores, potentially allowing better rates for prospective borrowers. This sets up a pricing competition between the systems, as they both charge for credit pulls. FICO didn’t have to deal with this competition before.

So, deeds may well be in reach for more people through the use of VantageScore. Specifically, VantageScore 4.0 accounts for electricity and rent payments if those payments are reported to the borrower’s credit report. That payment history can give lenders more information on renters, many of whom have been disadvantaged by the longtime reliance on the FICO score alone.

Of course, this also means lenders will consider a portion of higher-risk applicants as normal borrowers. This will make Fannie and Freddie that much more vulnerable if the economy faces a major test ahead. Raising the risk on a conventional mortgage, you might say, isn’t a slam-dunk benefit for housing. So while it’s good to see more applicants taken seriously, this “competition” could cut both ways.

When applicants in lower credit score ranges receive mortgage approvals, the lender charges for that risk. Borrowers on the borderline pay more in interest, and many have to make private mortgage insurance payments along with their regular loan payments.

Who’s Behind VantageScore?

VantageScore Solutions, a joint venture, has been in play for 20 years. Participants are the three major credit reporting companies: Equifax®, Experian™, and TransUnion®. Most readers will know these companies. Each one issues one free credit report to a person each year.

Lenders generally think of “good” credit in terms of a FICO® score of 670 to 739. A score higher than that gives an applicant access to even better loan terms. In other words, a “very good” or “exceptional” score lets the borrower have a more desirable interest rate.

Is FICO finished after this week? No. The RBC analyst believes FICO will continue to do well, but it might now have to make key changes to the way it makes money.

Meanwhile, FHA applicants, investor applicants, people financing vacation homes, people borrowing against their home equity, and many other non-conventional borrowers will still have to pass through the FICO filter.

Investors in loans prefer the FICO score, too. Even Rocket’s Rocket Pro, a division that supplies mortgages through collaborations with other brokers, will give them a FICO option.

Still, we could see some dominoes fall. If more applicants head for Fannie and Freddie to get the VantageScore treatment, the FHA and other government-backed programs may be pressed into changing their own models to compete. Already, United Wholesale Mortgage has moved away from FICO as the default service.

An Era Ends. And That’s the Way Real Estate Rolls

For 21^st-century conventional loans, the “classic FICO score” has been a mainstay. Some might have called it a monopoly—or something close to that. But here you are, late 2026 mortgage seekers. The adjustment is under way now. VantageScore 4.0 will be standard for mortgages to be backed by Freddie Mac, Fannie Mae, and the Department of Veterans Affairs.

Deeds.com called it in 2023: we saw a revamping of credit scoring models coming. The FICO® credit score is imperfect at best, as we wrote then:

There might be many good things in an applicant’s financial history—such as a long record of on-time rent payments—that aren’t counted at all, even though they’re obviously relevant to paying for housing.

Now we see the shakeup actually taking shape. Next? Let’s see how FICO adjusts and adapts.