Starting with FHA case numbers assigned on or after January 1, 2027, FHA lenders may qualify Chicago home buyers using VantageScore 4.0 or FICO 10T credit scores in addition to Classic FICO, while FHA’s minimum scores and its three-bureau credit report requirement stay the same.
Facts checked October 27, 2026 · Chicago First Time Home Buyer editorial team
What did FHA announce about credit scores?
On October 8, 2026, HUD issued Mortgagee Letter 2026-11. It changes how FHA lenders figure a borrower’s “minimum decision credit score” so they can use two newer scoring models, VantageScore 4.0 and FICO 10T, alongside Classic FICO. HUD says the newer models use trended data (how your credit use changes over time) and can draw on non-traditional credit such as rent and utilities.
The change applies to FHA case numbers assigned on or after January 1, 2027. If your loan’s FHA case number is assigned before that date, the current Classic FICO method applies. Your lender can tell you when your case number was or will be assigned.
What changes for FHA buyers in 2027, and what stays the same?
| Item | Before Jan. 1, 2027 | Case numbers on or after Jan. 1, 2027 |
|---|---|---|
| Score models a lender can submit | Classic FICO | Classic FICO, VantageScore 4.0 and/or FICO 10T |
| Credit report | Tri-merge (all three bureaus) | Tri-merge (unchanged) |
| Lowest score FHA accepts | 500 | 500 (unchanged) |
| Score for the lowest FHA down payment | 580 or higher | 580 or higher (unchanged) |
| Score 500–579 | Loan limited to 90% of value | Loan limited to 90% of value (unchanged) |
| Co-borrowers | — | Every borrower on the loan must be scored with the same model(s) |
A loan limited to 90% of value means a down payment of at least 10%. For how FHA compares with conventional and VA loans, see Mortgage Options for First-Time Buyers in Chicago.
How will lenders pick the score that counts?
Under the new method, the lender first picks one score from each model it submits: the middle score if there are three different scores, the lower score if there are two, or the only score if there is one. Your “borrower-level score” is the lowest of those picks. If two or more people are on the loan, the score FHA uses for the loan is the lowest borrower-level score among them.
That means submitting more than one model never raises the score that counts; the lowest result across the models submitted is used. Lenders are not required to use the new models. HUD’s guide says a lender “may choose” which models to submit and may prefer to use one model for all borrowers.
Does this change conventional loans from Fannie Mae and Freddie Mac?
Conventional loans moved first. According to FHFA (page updated October 2, 2026), lenders selling loans to Fannie Mae and Freddie Mac can already use either Classic FICO or VantageScore 4.0, chosen loan by loan, with the same model for all borrowers on a loan. VantageScore 4.0 was opened to all approved lenders on September 9, 2026. FICO 10T is approved but not yet eligible for delivery, and FHFA lists no retirement date for Classic FICO.
What should a Chicago first-time buyer do now?
- Ask each lender which score model it uses for FHA and conventional loans, and whether that will change in January.
- If your score is close to 580, ask the lender to run the numbers both ways once it can, and ask how timing your FHA case number could matter.
- Keep paying rent and utilities on time and avoid new debt before closing; the newer models can look at payment patterns over time.
- If you plan to use assistance such as HomeGrown or another Chicago down payment program, confirm the program’s own credit rules with its administrator, since program rules can differ from FHA’s.
- Recheck your budget with current rates on our monthly payment page and work through the first-time buyer checklist.
A HUD-approved housing counselor can go over your credit report with you before you apply. See where to take homebuyer education in Chicago.
Common questions
When does FHA start accepting VantageScore 4.0?
For FHA case numbers assigned on or after January 1, 2027, under HUD Mortgagee Letter 2026-11. Lenders choose whether to use it.
Is the FHA minimum credit score changing in 2027?
No. FHA still requires a score of at least 500, and a score of 580 or higher for maximum financing; scores of 500 to 579 are limited to a 90% loan-to-value ratio.
Will FHA lenders pull only two credit bureaus?
No. HUD says FHA will continue to require a tri-merge credit report from all three bureaus.
If my co-borrower has a better VantageScore, can the lender use it just for them?
No. The lender must use the same model or models for every borrower on the loan, and the lowest borrower-level score is the one that counts.
Sources
- HUD, Mortgagee Letter 2026-11: Updated Minimum Decision Credit Score Methodology for the Implementation of Alternative Credit Scores (Oct. 8, 2026)
- HUD, FHA Alternative Credit Scores Preparedness Guide
- HUD, “Homebuying Advances into New Era of Credit Score Competition” (No. 26-026, April 22, 2026)
- FHFA, Credit Scores (updated Oct. 2, 2026)