How Fannie Mae and Freddie Mac's Expanded Credit Score Models Are Changing Homebuying in 2024

If you’ve been dreaming of homeownership but worried your credit history might hold you back, there’s good news on the horizon. In 2024, Fannie Mae and Freddie Mac—the two giants that back most home loans in the U.S.—are shaking up the mortgage world by expanding the credit score models they accept. Let’s break down what this means for buyers, sellers, and the housing market as a whole.

What’s Changing? 🏡

Traditionally, mortgage lenders working with Fannie Mae and Freddie Mac have relied on older versions of the FICO score to assess a borrower’s creditworthiness. But starting this year, these agencies are embracing new models, including VantageScore and updated FICO versions. This shift allows lenders to use more comprehensive data—like rent, utility, and phone payments—when evaluating loan applicants.

Why Does This Matter?

• More Inclusive Lending: Millions of Americans with thin or non-traditional credit files could now qualify for mortgages. If you’ve been responsibly paying rent or utilities but haven’t used credit cards much, you could see a boost.
• Greater Competition: With more credit models in play, lenders can better match borrowers with loans tailored to their financial picture, potentially leading to better rates and terms.
• Market Impact: More buyers entering the market could increase demand, which might nudge home prices up in some areas—but it also means more people achieving the dream of homeownership.

What Should Homebuyers Do?

If you’re thinking about buying, now’s a great time to check your credit reports—not just your FICO, but also VantageScore, since lenders might use either. Make sure your rent and utility payments are being reported, and look for opportunities to build positive credit history in new ways. Don’t hesitate to talk to your lender about which credit model they use and how you can put your best financial foot forward.

The Bottom Line

Fannie Mae and Freddie Mac’s expanded credit score acceptance is a big step toward a more inclusive and dynamic housing market. Whether you’re a first-time buyer or looking to move up, understanding these changes can help you make smarter decisions—and maybe open the door to your next home.