FHA Approved New Credit Models for Mortgage Applicants
The FHA will adopt credit-scoring models that include rental and utility payments, potentially helping more renters qualify for loans.
Updated on Oct. 13, 2026 in Residential
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The FHA announced it will begin accepting VantageScore 4.0 and FICO Score 10T for mortgage approvals starting in 2027. This change aims to expand access for prospective buyers as the median age of first-time homebuyers has climbed to 40.
Why it matters
By incorporating rental and utility payment histories into credit evaluations, federal authorities aim to help more Americans build generational wealth. This update comes as the United States grapples with a national housing shortage estimated between 5 million and 7 million units.
First-time buyers account for 21% of home purchases, while the median age of these buyers has reached 40. Last year, HUD helped 1.5 million people become homeowners, with 80% being first-time buyers.
The players
HUD
The federal agency that administers housing programs, provides mortgage insurance through the FHA, and helps households achieve homeownership.
Scott Turner
The HUD Secretary who oversaw the announcement of federal housing initiatives in Palm Harbor.
The details
The adoption of VantageScore 4.0 and FICO Score 10T allows lenders to look beyond traditional credit history when assessing loan applications. By including consistent payments for rent and utilities, the FHA seeks to qualify applicants who might otherwise lack sufficient credit data. This shift is part of a broader administrative effort to streamline housing rules and address the national supply shortage.
Timeline
- 2026-10-13
HUD Secretary Scott Turner visited Palm Harbor, Florida.
- 2027-01-01
FHA implements new credit-scoring models.
Money Landscape
The current 40-year median age for first-time buyers marks a significant departure from historical trends documented in the National Association of Realtors home buyer profile. This shift underscores the increasing difficulty young households face in accessing the housing market.
Prospective buyers who struggle with traditional credit scores may find more options to qualify for an FHA-insured mortgage starting in 2027. Review your rental and utility payment records now to ensure they are accurately reported, but consult a professional before making major mortgage plans.
The takeaway
The move to update credit-scoring models is a federal effort to help more families navigate the current 5 million to 7 million unit housing shortage. Prospective homeowners should monitor their credit report accuracy and discuss how alternative payment data might impact their approval eligibility.
Further reading
For more information on housing market trends and federal policy, visit Residential.
Source note: This article includes information reported by Spectrum News Bay News 9.
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