National Association of Realtors Executive Vice President and Chief Advocacy Officer Shannon McGahn has responded to a recent announcement by the Federal Housing Finance Agency (FHFA). The announcement, made by FHFA Director Bill Pulte, stated that Fannie Mae and Freddie Mac will now allow mortgage lenders to use VantageScore credit ratings alongside or instead of traditional FICO scores for assessing borrower creditworthiness.
"The National Association of Realtors has long called for modernizing the credit scoring system to better reflect how today's consumers manage their finances. We applaud the announcement from FHFA Director Bill Pulte that the GSEs will soon begin accepting VantageScore in addition to other credit scoring models," said McGahn.
She emphasized that this change is a significant move towards a more accurate and equitable mortgage underwriting process. "This is a major step toward a more accurate and equitable mortgage underwriting process, one that considers timely rent, utility, and telecom payments as indicators of creditworthiness. These are real-world factors that show how people pay their bills and should count when determining if someone qualifies for a mortgage."
McGahn also noted the benefits of expanding acceptable credit scoring models: "Expanding the number of acceptable credit scoring models also fosters competition in credit reporting, which will lower costs, increase accuracy, and ultimately help more qualified Americans achieve homeownership."
For further details on this update and other housing policy news, readers are directed to NAR's Washington Report.
The National Association of Realtors plays an active role in both residential and commercial real estate sectors. The term Realtor signifies a real estate professional who is part of the association and adheres to its strict Code of Ethics. Additional resources for consumers navigating homebuying and selling processes can be found at facts.realtor.
