Renters FLOOD Market—Historic New Mortgage Rule PASSES

The Federal Housing Finance Agency’s decision to let rent payments count toward mortgage qualification is being hailed as “historic,” but for Americans who value responsible lending and sound housing policy, it raises a host of questions about fairness and risk.

At a Glance

The FHFA now allows VantageScore 4.0, which includes rent payments, to qualify buyers for Fannie Mae and Freddie Mac mortgages.
Proponents claim up to 5 million new buyers could enter the housing market, unlocking $1 trillion in new mortgages.
The Trump-era Credit Score Competition Act directly led to this shift, aiming to break FICO’s monopoly.
Critics warn that expanding mortgage access through non-traditional credit could increase risk and government exposure.

Rent Payments Now Count: The FHFA’s “Revolutionary” Gamble

On July 8, 2025, the Federal Housing Finance Agency announced that lenders can immediately use the new VantageScore 4.0 credit scoring model—one that accounts for rent and other non-traditional payments—to qualify borrowers for mortgages backed by Fannie Mae and Freddie Mac. The move is touted as a “revolutionary” step in democratizing homeownership, supposedly unlocking the dream for millions who couldn’t previously qualify under the old FICO regime. But let’s not kid ourselves: when government agencies start rewriting the rules to favor “inclusion” over prudence, the taxpayer is almost always left holding the bag.

FHFA Director Bill Pulte, the man at the helm, claims this decision “increases competition in the credit-score ecosystem” and fulfills a Trump-era mandate to lower costs. The facts: VantageScore 4.0, created by the big three credit bureaus, will run alongside FICO, letting lenders pick whichever model gets more people through the door. That’s a recipe for risk, not stability. And yet, the industry is tripping over itself to call it progress.

Who Wins, Who Loses, and Who Pays?

The new scoring model is said to benefit renters, minorities, and anyone with a “thin” credit file. Up to five million new buyers could flood the mortgage market, according to VantageScore’s own press releases, with $1 trillion in new loans up for grabs. The GSEs—Fannie Mae and Freddie Mac—will now back mortgages for people whose main claim to creditworthiness is that they paid their rent on time. No new infrastructure required, just a quick update to the paperwork. How convenient. But if we learned anything from the last housing crisis, it’s that lowering the bar to homeownership does not end well for taxpayers or the broader economy.

Supporters frame this as a long-overdue fix for an “unfair” system that left out good renters. They argue the FICO monopoly stifled innovation and kept deserving people from buying homes. But let’s translate: the government is once again meddling in the market, subsidizing risk, and inviting more people to buy homes with less skin in the game. FICO’s stock price already tumbled on the news, and you can bet that’s not because investors believe this will make lending safer.

The Politics and Perils of Credit “Inclusion”

This shift didn’t come out of nowhere. The Credit Score Competition Act, signed by President Trump in 2018, forced the FHFA to consider alternatives to FICO. On paper, more competition sounds great. In practice, it means the government is picking winners and losers—again. The immediate effect is to expand the pool of eligible borrowers, which sounds fine until you remember that Fannie and Freddie are still backed by taxpayers. And if the riskier loans go bad, you know who will pay the bill.

Industry leaders and housing advocates are spinning this as a social justice win. Silvio Tavares, CEO of VantageScore, went so far as to say the change will “revolutionize the American mortgage market and grant millions the golden opportunity to own their homes.” But let’s ask the obvious: what good is expanding homeownership if it comes at the expense of responsible lending? The last time the government decided to “revolutionize” housing, it nearly sank the global economy. Yet here we are again, watching the same old playbook get dusted off and repackaged as innovation.