Real Estate Law · August 29, 2026 · 8 min read
The Federal Housing Administration is adding new credit-scoring models this January, but it's keeping the old one too.
That might sound like bureaucratic housekeeping, but it matters a lot if you're a first-time buyer in Baltimore County, Harford County, or anywhere else in my Maryland-DC-Pennsylvania-Delaware territory. FHA loans are the backbone of affordable homeownership for thousands of families every year, and the credit score is the gatekeeper.
HousingWire reported Friday that lenders expect the FHA to require "model consistency at the loan level" when the new credit models launch in January 2027. Translation: lenders will be able to use the newer VantageScore 4.0 or FICO 10T models alongside the Classic FICO that's been the industry standard for decades, but they'll have to pick one scoring system per loan—not cherry-pick the highest score from different models.
Classic FICO stays in the game. That's the headline.
Let me tell you why this matters at your kitchen table, not just in some underwriting department.
Right now, if you apply for an FHA loan, your lender pulls your Classic FICO score—the same scoring model that's been around since the early 2000s. It looks at payment history, credit utilization, length of credit history, new credit inquiries, and the mix of credit types you have. Most people who've ever checked their credit score have seen some version of a FICO score.
Starting in January, the FHA will allow lenders to use two additional models: VantageScore 4.0 and FICO 10T. Both are newer. Both claim to be better at predicting risk, especially for people with thin credit files or non-traditional credit histories (think rent payments, utility bills, that sort of thing).
Here's where it gets practical. The new models could help some buyers who've been responsible with money but don't have a thick credit file. Maybe you've been paying rent on time for years but never had a credit card. Classic FICO doesn't see that. VantageScore 4.0 can incorporate rental payment history if it's been reported to the credit bureaus.
But—and this is important—lenders will still be able to use Classic FICO. Nobody's forcing them to switch. And the expectation, per HousingWire's sources, is that lenders will have to use the same model across the entire loan file. No mixing and matching to game the system.
The FHA minimum credit score for most programs is 580 for a 3.5% down payment, or 500 with 10% down. Those thresholds aren't changing. What's changing is how your score gets calculated if your lender opts for a new model.
I work with a lot of first-time buyers across Maryland—Harford, Cecil, Baltimore County, Anne Arundel, Montgomery, Howard, Charles, Prince George's—and into DC, York and Lancaster Counties in Pennsylvania, and New Castle County in Delaware. FHA loans are huge in these markets, especially for teachers, healthcare workers, young families, anyone stretching to get into a starter home in a market where mortgage rates just hit 6.66% this week and affordability is tight.
If you're sitting at a 620 credit score with a thin file, the new models might help you. If you're at 720 with a traditional credit history, you probably won't notice a difference. Your lender will likely stick with Classic FICO because it's familiar, it's consistent, and the underwriting infrastructure is already built around it.
But here's the thing: if you're planning to buy in the next six months, this is a good time to check your credit and ask your lender which scoring model they plan to use come January. Some lenders may adopt the new models quickly if they see an advantage in serving borrowers with non-traditional credit. Others will wait.
I had a buyer last spring—single mom, worked in healthcare, great income, paid every bill on time but had almost no credit cards because she didn't trust them. Her Classic FICO was lower than it should've been given her actual financial responsibility. VantageScore 4.0 would've told a better story. She still got the loan, but it took more documentation and a manual underwrite. In a few months, that process might be smoother for someone in her shoes.
This change didn't happen in a vacuum. The FHA has been under pressure for years to modernize its credit standards and expand access, particularly for communities that have historically been underserved by traditional credit scoring.
The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, announced similar changes a while back, signaling that the conventional loan market was also moving toward newer credit models. The FHA is following that lead, but more cautiously.
There's a fair-lending angle here too. Older credit models can penalize people who manage money responsibly but don't fit the traditional credit mold—disproportionately affecting younger buyers, immigrants, and communities of color. The new models aim to be more inclusive without sacrificing predictive accuracy. Whether they succeed is something we'll learn over the next few years as the data comes in.
If you're buying a home in Maryland, DC, Pennsylvania, or Delaware and you're worried your credit history doesn't tell the whole story, talk to your lender about which scoring model they'll use and whether the new options might work in your favor.
If you're selling a home in Harford County or Baltimore County or anywhere else in our region, you care about this because you care about your buyer pool.
FHA buyers are a significant chunk of the market, especially in the $250,000–$450,000 range. Anything that makes it easier for creditworthy buyers to qualify means more potential offers on your home. If the new credit models help even a small percentage of buyers qualify who wouldn't have under Classic FICO, that's a win for market liquidity.
It's also a reminder to price your home realistically and keep it in good condition. FHA appraisals are stricter than conventional—peeling paint, broken railings, roof issues can all delay or kill a deal. I wrote about what your Maryland net sheet isn't telling you about closing costs a couple days ago, and the same principle applies here: know your buyer, know their financing, and don't be surprised when the appraiser flags something you've been ignoring for three years.
If you're planning to buy a home in Maryland, DC, Pennsylvania, or Delaware using an FHA loan in the next six to twelve months, here's your checklist:
This is general information, not legal advice—for your specific situation, please consult a licensed real estate attorney.
But for credit and loan qualification questions, your lender is your best resource. And if you don't have a lender yet, I can connect you with people I trust—folks who'll walk you through the numbers without the pressure.
It's worth zooming out for a second. The FHA credit score change is landing in a tough market. Rates jumped to 6.66% this week, per Freddie Mac's latest survey, and Fed Chair Warsh just delivered a hawkish speech at Jackson Hole that sent mortgage rates up even further—I covered that yesterday.
When rates are high and affordability is squeezed, every little advantage matters. A credit score that's 20 points higher can mean a lower interest rate, which over 30 years is tens of thousands of dollars. So yes, this FHA rule change is technical and wonky, but it's also real money in real people's lives.
If you're a buyer who's been on the fence, waiting for rates to drop or inventory to improve, I'd say this: don't wait for perfect conditions. They won't come. But do get your financial house in order—credit, savings, debt payoff—so that when you're ready to move, you're in the strongest possible position.
And if you're looking at homes for sale in Harford County or anywhere else I serve, let's talk. I spent 20 years in education before I became a Realtor, and I approach this work the same way: I'd rather teach you how the process works than sell you on a house you're not ready for.
The FHA credit score change is one more tool in the toolbox. It won't magically solve the affordability crisis or make mortgage rates drop, but for some buyers—especially those with non-traditional credit histories—it might open a door that was previously closed.
That's worth paying attention to.
If you have questions about FHA loans, credit scores, or what any of this means for your specific situation, reach out. I'm licensed in Maryland, DC, Pennsylvania, and Delaware, and I'm always happy to talk through the details—no pressure, no sales pitch, just honest answers.
Katrina Kirton Sherrod, REALTOR® · Samson Properties · Licensed in MD, DC, PA & DE · 443-616-9770 · Katrina@kkstherealtor.com
“Buyers decide in the first eight seconds of seeing a home if they are interested. Get out of the car, walk in the door — sold.” — Barbara Corcoran