Earlier this month, the Federal Home Loan Bank of San Francisco issued a report titled “Closing The Racial Equity Gap: A Call To Action,” exploring the factors contributing to America’s persistent homeownership divide. The report references the mandated use of Vantagescore 4.0 in GSE-funded mortgages beginning in 2024 as likely helping to close the Racial Homeownership Gap for creditworthy borrowers of color while maintaining predictive performance.
The report states, “In October 2022, the Federal Housing Finance Agency gave its approval to VantageScore 4.0, opening the door to widespread industry adoption of the updated scoring methods. By incorporating rental payments and other data inputs into scoring algorithms, VantageScore estimates that 4 million borrowers of color can be newly scored at 620 and above.”
Recently, VantageScore released new research on the quantitative impact of requiring VantageScore® 4.0 credit scores as mandated by the Federal Housing Finance Agency (FHFA) for all Government-Sponsored Enterprise (GSE)-funded mortgages beginning in 2024. The research findings note that an estimated 4.9 million new borrowers could gain access to the mortgage market, and lenders could originate as many as 2.7 million mortgages, with an annual loan volume as high as $1 trillion.
Read the full report by the Federal Home Loan Bank of San Francisco here.
Review the findings of VantageScore’s recent whitepaper and explore the potential impact of mandating VantageScore 4.0 for GSE-funded mortgages here.
The post A Call to Action: VantageScore Highlighted by the Federal Home Loan Bank of San Francisco (FHLBSF) for Working to Close the Racial Homeownership Gap appeared first on VantageScore.