The U.S. Mortgage Insurers repeated its commitment for members to work with the Federal Housing Finance Agency to implement VantageScore 4.0.

In an Aug. 27 blog post, the group said it welcomed FHFA Director Bill Pulte’s announcement permitting Fannie Mae and Freddie Mac to accept loans using the VantageScore 4.0 algorithm and its members will also be ready to do so “in accordance with the [government-sponsored enterprises] timelines and guidance.”

Back in July, following Pulte’s action, some analysts pondered whether the private mortgage insurers had the willingness, as well as the capabilities, to underwrite policies on loans that used VantageScore 4.0. The GSEs will not purchase mortgages with loan-to-value ratios over 80% without some form of credit enhancement.

Back in July, USMI said it and its members were committed to working with the FHFA, the GSEs and others to navigate the operational considerations, in a statement for National Mortgage News.

The group’s own data found that approximately 800,000 conforming mortgage borrowers in 2024 needed private MI as a credit enhancement.

VantageScore touts its model as being able to score more consumers than Classic FICO, until recently the only algorithm the GSEs would accept.

“The market is moving quickly to implement VantageScore 4.0 as directed by Director Pulte, and we look forward to assisting the mortgage insurers in any way possible,” a statement from a VantageScore spokesperson said.

In a 2024 USMI survey, “an imperfect credit history was cited by 20% of respondents as one of the biggest challenges that potential homebuyers face”, the blog said.

“Including rental payment data could be consequential for prospective homebuyers seeking to put down roots and begin building equity, and modernized credit scores that include trended data can enhance the assessment of risk,” the post continued.

Like VantageScore 4.0, FICO 10T also allows for trended data in its model. FHFA says while it is an approved model for future use, only Classic FICO and VantageScore 4.0 are allowed to score mortgages sold to Fannie Mae and Freddie Mac.

“Pursuant to Director Pulte’s announcement, USMI members will continue to actively work with the GSEs and update technology systems to implement this lender-choice credit score policy. USMI and its members support modernizing credit score models and will be ready to accept loans with VantageScore 4.0 credit scores in partnership with the GSEs,” the conclusion of the blog post said.