VantageScore 4.0 Is Now Accepted — Here's What It Means for Your Rate

Fannie Mae and Freddie Mac have released new pricing guidelines for VantageScore 4.0, meaning your credit score model now directly affects your mortgage costs. Here's what California homebuyers need to know.

Big news in the mortgage world: lenders can now use VantageScore 4.0 (VS4) alongside the traditional FICO score when qualifying borrowers for conventional loans. But there's an important catch that every California homebuyer and refinancer should understand.

VS4 scores tend to run higher than classic FICO scores — sometimes significantly. To level the playing field, Fannie Mae and Freddie Mac are applying a 20-point downward adjustment to VS4 scores before calculating your loan-level price adjustment (LLPA). In plain English, that means your pricing tier is based on your VS4 score minus 20 points.

So if you're sitting at a 740 VS4 score, you'll be priced as if you have a 720 FICO — which affects the fee added to your rate. The higher your score bucket, the lower your costs, so knowing exactly where you land under both models matters.

The good news? Having access to two scoring models gives some borrowers — especially those with thin credit histories — a better shot at qualifying.

Not sure how your credit score translates under the new guidelines? Contact us today and we'll run the numbers for you and find the best path to your loan.