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VantageScore 4.0 Expanding in Fannie Mae
VantageScore 4.0 Expanding in Fannie Mae and Freddie Mac
The main story today is about a change in the mortgage industry. VantageScore 4.0 is now being used more by Fannie Mae and Freddie Mac lenders. Mortgage rates are over seven percent. Home sales are slow. New‑home prices have fallen. VantageScore 4.0 is being used more in mortgage lending. This is your September 29 housing update.
GCA Mortgage Forums News for Tuesday, September 29, 2026-Mortgage Rates Rise Above 7% as Buyers Face a Changing Housing Market
Mortgage rates are rising again. Existing‑home sales stay slow. Buyers across the country find it harder to afford homes. The housing market is not moving the way everywhere. Existing‑home sales fell in August. New‑home sales went up. National home prices keep climbing even as builders lower prices in some places. Fewer people are applying for mortgages, and more buyers are seeking alternative loan options and better deals. A major change could soon impact how millions of people qualify for conventional mortgages.
Welcome to GCA Mortgage Forums Daily News, Your National Update on Mortgages and Housing from GCA Mortgage Forums.
Mortgage rates are back above 7%. The latest Freddie Mac Primary Mortgage Market Survey shows the 30‑year fixed mortgage rate at 7.03 % as of September 24, up from 6.95 percent a week earlier.
The average 15‑year fixed mortgage rate rose to 6.42 %, up from 6.26% the week before. One year ago, the average 30‑year rate was 6.30 %.
On September 29, daily mortgage‑rate trackers showed rates rising in some areas. Average 30‑year conventional rates were above 7.3 percent. The rate you get depends on your credit, your payment, the type of property, the points you choose, and the lender.
Why Higher Rates Matter So Much Today
The problem is not that mortgage rates are above 7%. Home prices are also much higher than they were before the pandemic. This mix has made payments too high for many first‑time and move‑up buyers. Even a small rate increase can lower what buyers can afford or raise the cash needed at closing.
Because of this, the adjusted annual rate of home sales is now 3.98 million, according to the National Association of Realtors. Inventory improved, however, rising to 1.62 million homes, representing 4.9 months of supply.
The median existing-home sales price increased 1.6% from one year earlier to $429,100. This combination shows what is really happening in today’s market: buyers have more options, but affordability remains a major challenge.
The Census Bureau reports that new single‑family home sales reached an adjusted annual rate of 684,000, up 6.4 percent from July.
The Median New-Home Sales Price Was $393,700, Down 5.8% from August 2025
Builders had 483,000 homes available for sale, which equals 8.5 months of supply. The drop in the price matters a lot. Builders can lower prices, help with closing costs, or offer mortgage‑rate deals in ways that individual sellers cannot. This gives new construction an advantage in some markets.
Mortgage Applications Are Losing Momentum
Demand for mortgages also dropped. The Mortgage Bankers Association said total applications fell 1.5% for the week ended September 18. Purchase applications dropped 1% compared to the previous week and were 11% lower than the same time last year. Refinance applications fell 3% and remained 62% below their year-earlier level. These numbers show a common problem: higher mortgage rates are making it harder to buy or refinance a home.
TOPIC OF THE DAY: VantageScore 4.0 Is Changing Conventional Mortgage Lending
One of the biggest mortgage changes in 2026 is not getting the attention it deserves from consumers. Fannie Mae and Freddie Mac lenders can now use VantageScore 4.0 for eligible loans. FHFA expanded the availability of VantageScore 4.0 to all approved Fannie Mae and Freddie Mac lenders on September 9, eliminating the previous requirement for special approval. Lenders may continue to use Classic FICO or VantageScore 4.0 under Enterprise guidelines.
Why This Matters to Borrowers
For decades, conventional mortgage lending relied heavily on the Classic FICO score. VantageScore 4.0 looks at credit a bit differently and can include additional information, such as rental payment history. This does not mean that everyone who was denied before will now qualify under the new system.
But it does create more competition in credit scoring and could give lenders new ways to assess borrowers with incomplete credit profiles. FHFA says the modernization effort is intended to improve credit risk assessment, expand competition, and potentially reduce costs. Mortgage professionals and consumers should watch this story as we move into 2027.
Home Prices Are Still Rising Nationally
FHFA shared its House Price Index on September 29. The index covers July 2026. It shows changes in single-family home prices using mortgages that Fannie Mae and Freddie Mac bought or packaged into securities. Across the country, sales are moving slowly. It is hard to afford homes, but home prices are still going up.
That is why it is important to look at today’s market on a local level. Some areas still have old inventory and rising prices. Others are seeing homes stay on the market longer, with more seller concessions and price cuts.
What Buyers Should Watch Next
If You’re Buying Now, Here are Four Things to Watch:
- Mortgage rates and lender pricing.
- Local inventory and seller competition.
- Builder incentives on new construction.
- Changes in credit-score eligibility and underwriting.
The lowest advertised rate might not be the mortgage for you. Make sure to look at the interest rate, APR, discount points, lender fees, mortgage insurance, and the total cash you need to close the deal.
Frequently Asked Questions
What is the current 30-year mortgage rate?
Freddie Mac’s most recent weekly national average was 7.03%, as of September 24, 2026.
Are home prices falling nationally?
Not broadly. Some markets are declining, but national home-price indexes still show year-over-year appreciation.
Is this a buyer’s market?
It depends on the location. Rising inventory is giving buyers more negotiating power in some markets, while supply remains tight elsewhere.
Can lenders use VantageScore 4.0 for conventional mortgages? Yes. FHFA says all approved Fannie Mae and Freddie Mac lenders may now use VantageScore 4.0 for eligible loans under current Enterprise requirements.
Will VantageScore replace FICO?
Not immediately. Classic FICO remains permitted, and FHFA’s credit-score modernization process continues.
The Bottom Line
As of September 29, 2026, the housing market is expensive, unpredictable, and more competitive than ever. Mortgage rates are above 7%. Existing-home sales remain slow. Mortgage applications are soft. But new-home sales are improving, inventory is growing, and mortgage underwriting itself is beginning to change.
For buyers, this means you might not want to wait for the whole market to change. Instead, focus on finding the property, loan program, lender, and underwriting strategy for your needs.
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This discussion was modified 3 weeks, 1 day ago by
Sapna Sharma.
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1 Reply
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Fannie Mae and Freddie Mac have begun using VantageScore 4.0 for underwriting, marking a significant shift in the industry. This update directly impacts the ‘stalled but recoverable’ file issue you raised. The new credit score model is now a key factor in determining whether a file can be revived. Here’s a quick look at what’s changing and how it will shape our work.
What’s actually changing: The move to VantageScore 4.0 is the first major shakeup to the FICO rule in years. Previously, Fannie Mae and Freddie Mac relied on the ‘classic’ FICO score, which simply used the middle score from the three credit bureaus. Now, the FHFA is requiring both VantageScore 4.0 and FICO 10T to be accepted. This sweeping change will unfold over several years and will require us to update our systems, pricing, and processes. These are the two main features: Trended credit data: Unlike classic FICO, which offers only a single snapshot, VantageScore 4.0 tracks patterns in balances, credit use, and payment habits over time. For instance, someone who was once maxed out but has steadily paid down debt will see their efforts rewarded with a higher score under VS 4.0 than with the old snapshot approach. VS 4.0 than with a snapshot model. Medical collection tolerance and rent/utility history: VS 4.0 is more forgiving with medical debts and also recognizes on-time rent and utility payments. This opens doors for people with limited credit histories or those whose credit was primarily affected by medical bills. Why this matters for the stalled-file problem: This gets to the heart of your earlier question. If a borrower was stuck in a ‘credit remediation’ or ‘second look’ queue due to a low classic FICO score, VS 4.0 could change their fate. A file that once needed 12-18 months of perfect payments to recover might now bounce back in just 3 months, or even qualify immediately. The new model’s focus on data patterns and rent or utility history can lift scores without any extra effort from the borrower, which has a direct impact on our operations: Re-scoring trigger: Files in remediation deserve a fresh look with the new model. Rather than letting them sit and age out under the old system, we should re-score them right away. If a file was sidelined because of classic FICO, that reason may no longer hold. Updating the scoring model is a strong signal to revisit these files. Organizations without a clear process for this will likely face challenges. The successor reconstruction problem: If the original loan officer has moved on and the note reads ‘FICO 640, needs to season,’ a new team member might assume this still applies under VS 4.0, even if it no longer does. They may not realize the file was scored using the old model. Current operational status: The transition has been complicated. The GSEs and FHFA have followed step-by-step timelines, but there have been the usual industry challenges, such as system updates and pricing changes. Many lenders still use systems built for classic FICO, so both models have been used during the transition, and scores don’t always match. Borrowers with certain data patterns or thin credit files, especially those with rent payment records, often benefit, while those with long credit histories and some past issues may see different results. The timeline has changed and been delayed several times, and exact dates depend on the agency or investor. Even if the GSEs accept VS 4.0, individual lenders and investors may set their own credit rules and model requirements. Just because the GSE accepts it doesn’t mean every lender’s system will follow. For stalled files, a model change is a good reason to review them, but it won’t automatically help every borderline borrower. Debt-to-income, savings, income documentation, and property eligibility still have to meet requirements. Key takeaway for your workflow research: The rollout of VS 4.0 offers a compelling real-world case for your research. Its adoption demonstrates how an external change can transform a ‘stalled but recoverable’ file into one that demands immediate attention. Organizations with strong review processes and triggers will catch these opportunities, while those without may let files slip by as borrowers’ situations evolve. Trended data also changes how underwriters evaluate income and debt-to-income ratios for borderline cases.
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