FHA will let lenders use VantageScore 4.0 and FICO 10T alongside Classic FICO for FHA loans with case numbers assigned on or after Jan. 1, 2027, under HUD Mortgagee Letter 2026-11 issued Oct. 8, 2026. The minimum credit score thresholds do not change: 580 for maximum financing and 500 as the floor. The change caps a year of FHA policy updates that also trimmed paperwork for borrowers and lenders.
What Mortgagee Letter 2026-11 changes
In Mortgagee Letter 2026-11, HUD said FHA is adopting FICO 10T and VantageScore 4.0 alongside Classic FICO to modernize its credit scoring framework. HUD said the newer models use trended data, which looks at credit behavior over time, and can use non-traditional credit such as rent and utilities.
The letter updates how lenders calculate the Minimum Decision Credit Score (MDCS) when more than one score model is on a credit report. It is effective for case numbers assigned on or after Jan. 1, 2027, and HUD said the changes will be folded into its Single Family Housing Policy Handbook 4000.1.
How the new score calculation works
For each borrower and each score model submitted, the lender picks the middle score when three differ, the lower score when two differ, or the only score if one is reported. The borrower's score is the lowest of those selected scores across the models submitted. The MDCS for the loan is the lowest borrower-level score among all borrowers.
Lenders may submit one or more score models, but the same model types must be used for every borrower on the loan. The letter gives an example: a lender cannot submit FICO 10T for the primary borrower and VantageScore 4.0 for the co-borrower. FHA will continue to require a tri-merge credit report.
Where a loan has multiple borrowers and one or more have no credit scores, the MDCS is the lowest borrower-level score among the borrowers who do have scores. The credit report kept in the case file must include every score model submitted in the final TOTAL Scorecard submission, and it may include additional models that were not submitted.
Credit score minimums stay the same
HUD said the existing minimum thresholds remain unchanged regardless of score model. Borrowers with an MDCS at or above 580 remain eligible for maximum financing, those between 500 and 579 are limited to a 90% loan-to-value ratio, and loans with an MDCS below 500 are not eligible for FHA insurance.
Borrowers without traditional credit scores can still qualify through manual underwriting, subject to FHA's ratio limits. The letter also removes the credit score reference from reverse mortgage (HECM) eligibility, since HECMs do not rely on credit scores. Learn more on our reverse mortgage page.
Other FHA changes in 2026
In June 2026 HUD issued several mortgagee letters aimed at reducing regulatory burden, as summarized by Ballard Spahr's Consumer Finance Monitor. Borrower-facing changes included:
- ML 2026-07: lenders no longer must provide Form HUD-92900-B, the Important Notice to Homebuyers.
- ML 2026-06: Limited 203(k) rehab loans can have up to four draws per contractor, up from two.
- ML 2026-08: updated loss mitigation rules, including allowing trial payment plan payments to change when tax or insurance escrow increases.
- 2026 limits: HUD's 2026 FHA loan limits set a one-unit floor of $541,287 and ceiling of $1,249,125 for case numbers assigned on or after Jan. 1, 2026.
What this means for Texas borrowers
If your FHA case number will be assigned in 2027, your lender may be able to evaluate newer score models. Because the minimums are unchanged and the lowest selected score generally controls, the change does not by itself guarantee easier approval; how it affects you may depend on your credit file and which models your lender uses.
If you have thin credit or rely on rent and utility history, it may be worth asking a loan officer how the new models could apply. Compare FHA loans with conventional options, review tips for credit-challenged borrowers, and see our first-time homebuyer guide. You can also find a loan officer to discuss timing.
Sources
- Mortgagee Letter 2026-11: Updated Minimum Decision Credit Score Methodology for the Implementation of Alternative Credit Scores, U.S. Department of Housing and Urban Development (October 8, 2026)
- HUD modifies FHA Mortgage Loan Policies to reduce regulatory burdens and promote affordability, Ballard Spahr Consumer Finance Monitor (June 26, 2026)
- HUD's Federal Housing Administration Announces 2026 Loan Limits, U.S. Department of Housing and Urban Development (December 11, 2025)
This article is for general information about the mortgage market and is not financial, legal or tax advice. Figures come from the sources listed and may have changed since publication. Rates and averages cited are published market data, not an offer or HomyLoan rates. HomyLoan, LLC is a licensed mortgage broker, Company NMLS 2783307, not a lender. All loans are subject to credit approval and program guidelines. Equal Housing Opportunity.
