Blog: USMI Members Stand Ready to Implement Director Pulte’s Credit Score Modernization
On July 8, 2025, Director of U.S. Federal Housing (FHFA) Bill Pulte announced that the government-sponsored enterprises (GSEs) – Fannie Mae and Freddie Mac – will allow lenders to use VantageScore 4.0 to deliver mortgage loans, in addition to the Classic FICO model that has been in place for more than 20 years. U.S. Mortgage Insurers (USMI) welcomes Director Pulte’s announcement allowing the GSEs to use VantageScore 4.0, and its members will be ready to accept loans with VantageScore 4.0 credit scores in accordance with the GSEs’ timelines and guidance.
This is a major step for aspiring homeowners and, in its statement in support of the announcement, USMI highlighted that its private MI members are committed to working with FHFA, the GSEs, and other industry partners to implement these changes and make homeownership more achievable and accessible for all Americans.
Following the July announcement, USMI and its members have been actively working to ensure the successful introduction of VantageScore 4.0. Director Pulte’s leadership is commendable and the policy approach is consistent with legislation authored by Senate Banking Committee Chairman Tim Scott (R-SC) and signed into law by President Trump in 2018 to increase competition by validating and approving new credit scoring models. As announced by FHFA, the new policy would allow lenders to choose between the two credit score models for loans sold to the GSEs to help more Americans become homeowners.
Since 1957, private mortgage insurance (MI) has helped nearly 40 million people across the country achieve the American Dream of homeownership with a low down payment. The goal of modernizing credit score models is laudable: safely and soundly expanding homeownership opportunities for more Americans by embracing innovation in borrower credit evaluation, in part, by incorporating trended credit data including rental payment history.
Why Private Mortgage Insurers Support Modernized Credit Scores
Homeownership serves as the primary path to stability, financial security, and intergenerational wealth for millions of Americans. However, barriers such as the inability to save for a traditional 20% down payment (and limited awareness of available low down payment options) and a lack of credit history can pose major hurdles for those seeking to purchase a home. A 2024 USMI survey found that nearly two-thirds of renters report that it had gotten harder to purchase a home in recent years. In addition, an imperfect credit history was cited by 20% of respondents as one of the biggest challenges that potential homebuyers face.
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.
Private MI helps homebuyers qualify for mortgage financing with a down payment as low as 3%, allowing families the opportunity to purchase a home sooner. For example, while it could take 26 years for a household earning the national median household income of $80,610 to save 20% plus closing costs for a $412,500 home, the time decreases to just nine years to save for a 5% down payment. With private MI and a 5% down payment, homeownership could be achieved 17 years sooner.
USMI’s recently released “50 States of Low Down Payment Homebuying” report found that, in 2024 alone, the private MI industry helped more than 800,000 low down payment borrowers. Approximately 65% of these purchasers represented first-time homebuyers.
Private MI paid monthly by the borrower is also temporary and is subject to automatic termination when the loan-to-value (LTV) ratio reaches 78% of the original property value, or can be cancelled at 80% LTV if certain criteria are met. This reduces the homeowner’s monthly mortgage payment and leads to potential savings over the life of the loan. Additionally, compared to other expenses associated with homeownership, such as hazard insurance and property taxes, the cost of private MI is low, representing a small part of the total cost of homeownership according to Fannie Mae. Publicly reported data confirm that the cost of private MI, as measured by in-force premium yields, has declined 25% since 2017, in stark contrast to other costs of homeownership, reaffirming that the small, temporary cost of monthly private MI provides homebuyers, lenders, the GSEs, and taxpayers with outsized benefits.
What’s Next
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.
