FHA Sets Score-Selection Rules for FICO 10T and VantageScore 4.0 Starting Jan. 1, 2027

The Federal Housing Administration issued Mortgagee Letter 2026-11, dated Oct. 8, 2026, which sets out how lenders choose the credit score that decides FHA eligibility when they submit Classic FICO, FICO 10T, VantageScore 4.0, or a mix of them. The rules apply to FHA case numbers assigned on or after Jan. 1, 2027.

Why this matters: When more than one scoring model is used, the letter says the lowest selected score across those models counts. Lenders and applicants need to know that before deciding which models to run.

Cover: The Robert C. Weaver Federal Building, HUD headquarters. Photo: U.S. Department of Housing and Urban Development, public domain, via Wikimedia Commons.

How the score is chosen

The letter works in three steps:

• Within each model: if three different repository scores are reported, use the middle one. If two are reported, use the lower. If one, use it.
• Borrower-Level Score: the lowest of the scores selected from each model type submitted. If only one model type is submitted, that score is the Borrower-Level Score.
• Minimum Decision Credit Score (MDCS): the lowest Borrower-Level Score among all borrowers on the loan. Borrowers with no credit score are left out of that comparison when another borrower has a score.

An example built from those rules: if a borrower's middle Classic FICO is 640 and middle VantageScore 4.0 is 625, and both models are submitted, the Borrower-Level Score is 625.

Guardrails in the letter

• Lenders may submit one or more model types, but must use the same model types for every borrower. The letter's example: FICO 10T for the primary borrower and VantageScore 4.0 for the co-borrower is not allowed.
• FHA will continue to require a tri-merge credit report.
• The credit report in the case binder must include every model type submitted in the final TOTAL submission.
• The minimum score thresholds do not change: below 500 is ineligible, 500 to 579 is limited to 90% loan-to-value, and 580 or above is eligible for maximum financing.

HUD says these updates will be added to a forthcoming revision of Handbook 4000.1. Other FHA guidance is posted on HUD's single family FHA information page.

What this is not

This letter covers FHA only. It is separate from Fannie Mae and Freddie Mac credit score implementation, and separate from credit bureau pricing such as the Equifax VantageScore offer mortgage.news covered on Oct. 9. The letter does not say any one model will produce higher or lower scores for a given borrower.

Practical takeaway

For FHA loan officers: pull more models only when you understand that the lowest selected score will govern, and keep model choice identical across co-borrowers. For applicants: ask which score models your lender plans to use and which score sets your loan-to-value limit, especially if you are near 580.