Freddie Mac securitizes first wave of VantageScore 4.0 mortgages through Newrez

Newrez originated roughly $10 million in mortgages scored with VantageScore 4.0 that Freddie Mac has now securitized, the company announced Friday. The move is part of a pilot that helped federal housing agencies greenlight wider use of modern credit scores. 

Newrez, a top-five mortgage lender and servicer, said that its “loan delivery limited engagement” with Freddie Mac demonstrated that VantageScore 4.0 can be used end-to-end for loans delivered to a government-sponsored enterprise (GSE). 

Other lenders are expected to follow suit. On Wednesday, Federal Housing Finance Agency (FHFA) Director Bill Pulte announced the pilot program that will allow the use of VantageScore 4.0 exclusively for loans delivered to Fannie Mae and Freddie Mac, future use of FICO 10T and a new pricing grid that reflects the updated models.

U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner also signaled the use of FICO 10T and VantageScore 4.0 for Federal Housing Administration (FHA) loans in the coming months, without providing more details. 

During a press conference the same day, Pulte said Freddie Mac had already received about $10 million in VantageScore 4.0-only loans as part of the pilot. 

Under a limited rollout, about 20 approved lenders may choose between VantageScore 4.0 and Classic FICO scores using tri-merge credit reports. Lenders not participating must continue using Classic FICO scores from all three bureaus. It is the most significant update to GSE credit score requirements in nearly three decades

“Newrez applauds the Trump Administration and FHFA Director Bill Pulte for their continued leadership in advancing credit score modernization and expanding access to homeownership for hardworking Americans,” Newrez President Baron Silverstein said in a statement. 

Silverstein added that Newrez’s investments in origination, technology, secondary markets and delivery operations show “what is achievable when a leading lender and a GSE partner with shared purpose.”

VantageScore 4.0 and FICO 10T incorporate trended data and additional inputs such as on-time rent payments, which were not considered in the legacy Classic FICO model that has dominated the mortgage market. FHFA and HUD officials have framed the change as a way to better capture the risk profile of creditworthy borrowers who have historically been underserved under the older scoring framework.

The pilot is central to FHFA’s broader credit score modernization timeline and gives originators a clearer view of the operational changes they will need to make in systems, product guidelines and investor communications.

Flávia Furlan Nunes reported and wrote this article with drafting assistance from HousingWire Automation, an editorial tool that helps transform announcements and industry data into HousingWire-style news coverage.