Housing Policy Council: FHFA pushed new credit model despite GSE resistance

Fannie Mae and Freddie Mac did not recommend approval of the VantageScore 4.0 credit model and supported a bi-merge reporting option, rather than the single-file option that’s been the subject of recent debate. This is according to conclusions reached by the Housing Policy Council (HPC) after it reviewed 316 pages of documents released by the Federal Housing Finance Agency (FHFA).

The HPC obtained the records through a Freedom of Information Act (FOIA) request submitted on July 31, 2023. The documents include materials related to the government-sponsored enterprises’ (GSEs) evaluation of credit scoring models, as well as plans for implementing a bi-merge credit reporting framework. While the FHFA released hundreds of pages, portions were redacted under FOIA exemptions.

Based on its review, the HPC concluded that the FHFA, under the Biden administration, directed Fannie and Freddie to approve VantageScore 4.0 despite the GSEs’ objections. A letter from former FHFA Director Sandra Thompson included in the materials reflects the GSEs’ disapproval of the model.

In July 2025, Thompson’s successor, Bill Pulte — who was appointed by the Trump administration — announced on social media that the GSEs would begin accepting VantageScore 4.0 immediately. 

The HPC also found that the GSEs determined tri-merge and bi-merge credit reports performed similarly, “whereas a single-file report showed a decrease in reliability in predicting borrower performance.”

Although the Mortgage Bankers Association (MBA) has supported the idea of a single credit pull under certain conditions, the group has faced criticism from the credit bureaus. In response to the HPC’s letter, the MBA said it “has for years pushed for the GSEs to release their historical data and believe they should refresh now, release, and quantify the differences.”

“The documents provided to HPC do not explain the policy rationale for these determinations,” HPC President Edward J. DeMarco wrote in a letter addressed to FHFA general counsel Clinton Jones on Jan. 30. “Therefore, HPC plans to file an appeal with FHFA seeking release of redacted and withheld information.”

According to the HPC, the FHFA has a statutory obligation to demonstrate that releasing the requested records would foreseeably harm the agency or the GSEs, and a duty to disclose final documents explaining the basis for its policy decisions.

The HPC said the information would be critical to global fixed-income and credit-risk transfer markets, and it could substantiate claims that the changes would produce more accurate, inclusive and predictive credit scores while lowering costs for lenders and borrowers.

“Many in the industry feel that the initiative, as currently proposed, in conjunction with other factors including but not limited to recent changes in credit reporting pricing, could increase costs for consumers,” the letter states. 

The HPC also urged the FHFA to release any cost-benefit analysis associated with the initiative.

An FHFA spokesperson told HousingWire that “members of Ed Demarco’s board say that they are not aligned with his comments nor the contents of his letter.” The HPC responded to that comment by saying “we have nothing to add.”

In a statement published Tuesday, FICO said the “long-anticipated results from the Credit Score Assessment conducted in 2021 as part of the Joint Enterprise Credit Score Solicitation” were not surprising, arguing that FICO Score 10T “is the most accurate model.”

The company also said it supports calls for the documents to be released without redactions. FICO added that it shares concerns about “adverse selection risks” under a lender-choice framework, which it said would lead to either higher costs for mortgage borrowers or reduced revenue for the GSEs.

A VantageScore representative shared a statement with HousingWire, saying that the FHFA’s analysis reaffirms the findings of other independent studies.

“VantageScore 4.0 is 13% more predictive of mortgage defaults than FICO Classic, and 15% more predictive during periods of macroeconomic stress,” the statement read. “Claims to the contrary mischaracterize the evidence. Notably, FICO is a dues-paying member of the Housing Policy Council, a financial relationship that helps explain this misrepresentation of the facts.

“Both Freddie Mac and Fannie Mae have consistently supported greater credit score competition, describing the implementation of VantageScore as an ‘important step forward’ in implementing more innovative and predictive credit scoring. Broad adoption of VantageScore would strengthen the mortgage market while delivering hundreds of millions of dollars in savings for lenders and homeowners.”

Sarah Wolak contributed reporting to this story.

Editor’s note: This story was updated with comments from VantageScore.