FHA issued Mortgagee Letter (ML) 2026-11 updating policy for the implementation of alternative credit scores to formalize the addition of VantageScore 4.0 (V4) and FICO Score 10T (10T) for use as acceptable credit score models alongside Classic FICO. Per the ML, FHA established guidance for determining the Minimum Decision Credit Score (MDCS) at the transaction level when multiple models are submitted. Specifically, this ML updated:
- Minimum Decision Credit Score (II.A.1.b.ii(A)(3)) to revise the methodology for determining the MDCS when multiple credit score models are present;
- LTV Limitations Based on Minimum Decision Credit Score (II.A.2.b.i) to align headings and terminology;
- Approvable Ratio Requirements (Manual) (II.A.5.d.viii) to align terminology;
- Loan-to-Value Ratios for Refinance (II.A.8.a.x(A)) to align headings and terminology;
- Borrower Eligibility – Credit Score (II.A.8.b.ii(A)(3)) to align terminology;
- Streamline Refinance Exemptions (II.A.8.d.vi(C)(1)) to align terminology;
- Updates Section 203(b) (II.A.8.o.vi(A)) to align terminology; and
- Removes Borrower Minimum Decision Credit Score (II.B.2.b.ii(A)(8)), as HECMs do not rely on credit scores, and renumbers subsequent sections.
The provisions of the ML must be implemented for Title II mortgage programs with FHA case numbers assigned on or after January 1, 2027 (lenders may, however, implement the provisions immediately).
Click to view the FHA Mortgagee Letter 2026-11: https://www.tenaco.com/wp-content/uploads/2026/10/FHA-Mortgagee-Letter-2026-11-10-08-26.pdf
Click to view the FHA Info #2026-24: https://www.tenaco.com/wp-content/uploads/2026/10/FHA-Info-2026-24-10-08-26.pdf
