For about as long as most of us have been paying attention, getting an FHA loan has meant one score. Classic FICO. Three bureaus, take the middle number, see where you land.
That's about to change. On October 8, HUD issued Mortgagee Letter 2026-11. Starting with FHA case numbers assigned on or after January 1, 2027, lenders can use two newer scoring models, VantageScore 4.0 and FICO 10T, alongside the Classic FICO that's been the only game in town for years. The plan was first announced in April. The October letter filled in the part everyone was waiting on: which score actually counts.
I'm Michael Steber, a REALTOR® and Designated Managing Broker with Keller Williams North Shore West, working exclusively with buyers and sellers across Lake County, Illinois. If you're planning to buy with an FHA loan next year, or you're selling a home FHA buyers tend to look at, this is worth five minutes.
Quick answer: Starting with FHA case numbers assigned on or after January 1, 2027, lenders can use VantageScore 4.0 and FICO 10T alongside Classic FICO. The minimum score thresholds don't change. But if a lender submits more than one model, the borrower's score is the lowest of them, not the best. Existing FHA loans aren't affected.
What's Actually Changing
The newer models read your credit differently. Classic FICO is mostly a snapshot of what your balances and payments look like right now. The newer models use what's called trended data, which looks at how you've handled your accounts over time. Paying your cards down month after month reads differently than carrying the same balance and making minimums.
It may be the only test where your worst grade is the one that counts.
They can also pick up rent and utility payments, if those payments are reported to the credit bureaus. That's a big if. Plenty of landlords don't report.
What's Not Changing
The score cutoffs stay put. 580 or higher still qualifies for FHA's maximum financing, which means 3.5% down on a purchase. Between 500 and 579, you're capped at 90% financing, so 10% down. Below 500, FHA isn't an option.
Lenders still pull all three bureaus. The tri-merge credit report isn't going anywhere.
Lenders can still set their own floor. FHA may allow 580, but plenty of lenders want 620 or higher. That doesn't change on January 1.
Income, debt, and the house itself still matter. A qualifying score has never been the whole approval, and it still isn't.
The Catch: The Lowest Score Wins
Here's the fine print most headlines skipped.
A lender can submit one model or several. If they submit more than one, they don't get to pick your best number. For each model, they take the middle of your three bureau scores. Then they compare across models and use the lowest.
So if your Classic FICO comes out at 615 and your VantageScore 4.0 comes out at 590, and the lender submits both, you're a 590 borrower.
With two buyers on the loan, the same math runs for each person, and the lower of the two sets the score for the whole deal. The lender also has to use the same model or models for everyone on the loan. No mixing and matching.
One exception worth knowing: if a co-borrower has no credit score at all, the loan goes off the score of whoever does have one. That co-borrower still gets underwritten the old-fashioned way.
Who Comes Out Ahead
Renters with a long, clean payment history. A lot of first-time buyers have paid rent on time for years with almost nothing to show for it on a credit report. If that rent is being reported, the newer models can finally see it.
People whose credit is trending the right way. If you had a rough stretch a few years ago and have been steadily paying things down since, trended data is built to notice that.
Thin files. Younger buyers, people who avoid credit cards, people new to the area. A model that looks at more of your history has a better shot at scoring them at all.
Who Should Be Careful
Anyone whose two scores land far apart. Under the lowest-score rule, more data isn't automatically better data.
People who carry balances. Trended data remembers. If you carry balances month to month and only make minimums, a model that looks back over time may like you less than Classic FICO does.
Anyone planning around a phone app. Free credit apps show a different version of your score than the ones FHA will accept. Don't plan a purchase around that number.
Anyone expecting January 1 to flip a switch. January 1 is when lenders can use the new models, not when they will. Lenders have to update their systems, vendors, and underwriting. Expect it to be uneven for a while.
If You Already Own
If you have an FHA loan today, nothing changes. Your rate, your payment, your terms all stay the same. A non-credit-qualifying FHA streamline refinance doesn't use a decision credit score in the first place.
If you're selling, especially in the price ranges where FHA buyers shop around Lake County, the honest answer is: maybe a slightly wider pool of buyers, eventually. I wouldn't price a house around it. FHA's appraisal and property standards haven't moved either, so homes that needed work to pass an FHA appraisal still do.
If You're Thinking About Buying in 2027
Ask your lender which model or models they plan to run after January 1, and whether they'll submit more than one.
Find out if your rent is being reported. Ask your landlord or property manager. If it isn't, ask whether they offer it.
Pay balances down and keep them down. With trended data, the habit counts, not just the month you apply.
Don't open new accounts in the months before you apply. That advice hasn't changed under any model.
Get pre-approved early so you see your actual scores, not an app's guess.
This isn't a revolution. It's FHA reading a bit more of your history than it used to. For some buyers, that's good news. For others, it's a reason to clean things up before January.
Frequently Asked Questions About the 2027 FHA Credit Score Changes
When do the FHA credit score changes take effect?
They apply to FHA case numbers assigned on or after January 1, 2027, under HUD Mortgagee Letter 2026-11.
Which credit scores can FHA lenders use?
Classic FICO, VantageScore 4.0, and FICO 10T. A lender can submit one model or more than one, but must use the same model or models for every borrower on the loan.
If a lender pulls more than one credit score model, which score counts?
For each model, the lender uses the middle of your three bureau scores. Then your score is the lowest of those across the models submitted. With more than one borrower, the lowest borrower's score sets the score for the loan.
Did FHA's minimum credit score change?
No. A score of 580 or higher still qualifies for maximum financing (3.5% down on a purchase). Scores from 500 to 579 are limited to 90% financing. Below 500, the loan isn't eligible for FHA insurance.
Will my rent payments help me qualify for an FHA loan?
Only if they're reported to the credit bureaus. The newer models can count rent and utility payments, but they can't see payments nobody reports.
Does this change affect my existing FHA loan?
No. Existing loans keep their rate, payment, and terms. A non-credit-qualifying FHA streamline refinance doesn't use a decision credit score at all.
Planning an FHA Purchase in Lake County Next Year?
If you're a year or so out from buying and wondering where you stand, now is a good time to talk. I can connect you with lenders who are tracking these changes and help you build a timeline that makes sense.
I work exclusively with buyers and sellers across Lake County, Illinois.
And if you buy with me and aren't satisfied within the first year, the Home Buyer Protection Plan means I'll sell your home and waive my listing-side brokerage fee, provided you use me for your next purchase — a real safety net, in writing. And if you're the one selling first, the Easy Exit Guarantee lets you cancel your listing agreement at any time before an offer comes in — no penalties, no obligations.
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About Michael Steber
Michael is a licensed REALTOR® and Designated Managing Broker with Keller Williams North Shore West, working exclusively with buyers and sellers across Lake County, Illinois. He writes The Weekly Welcome, a newsletter on local real estate, homeownership, and the occasional thing that has nothing to do with either.
This article covers communities including Grayslake, Libertyville, Gurnee, Winthrop Harbor, Wadsworth, Round Lake, Vernon Hills, Mundelein, Lake Bluff, Lake Forest, North Chicago, Waukegan, Zion, and surrounding Lake County communities. Sources: HUD Mortgagee Letter 2026-11 (October 8, 2026); HUD and FHFA credit score announcements (April 2026); FHFA credit score policy page. This is general educational information, not lending or financial advice — talk with a licensed mortgage lender about your specific situation.