FHA expected to keep Classic FICO as it adds new models in January

The Federal Housing Administration (FHA) is expected to go live in January with VantageScore 4.0 and FICO 10T, alongside the existing Classic FICO product, as part of a broad credit score modernization effort, according to industry sources who spoke with HousingWire. In a call with lenders earlier this week, FHA representatives told participants they will be able to deliver any of the three models for case files dated on or after Jan. 2027, sources said. The shift follows the U.S. Department of Housing and Urban Development (HUD)’s April announcement that FHA would adopt FICO 10T and VantageScore 4.0 for FHA loans. Based on the current discussions, lenders expect model consistency will be required at the loan level, meaning they would not be allowed to mix VantageScore 4.0 and FICO 10T (or other combinations) across co-borrowers on the same file. “You have to have model consistency with your borrowers in the same application, which I think makes some sense. It limits the gaming there,” a person familiar with the discussions said. At the same time, FHA has said in conversations with industry participants that Classic FICO will not be sunset as part of the rollout, sources added. “FH...