The Federal Housing Administration (FHA) will continue requiring lenders to use tri-merge credit reports for single-family mortgage loans, according to guidance issued Thursday by the U.S. Department of Housing and Urban Development (HUD).
The announcement comes weeks after HUD and the Federal Housing Finance Agency (FHFA) jointly unveiled plans to allow both FICO 10T and VantageScore 4.0 to be used alongside the longstanding Classic FICO model for FHA-insured loans.
“FHA will continue to require the use of a tri-merge credit report, ensuring a comprehensive and consistent evaluation of borrower credit information across all acceptable scoring models and supporting prudent risk management,” the FHA said in guidance issued Thursday.
Tri-merge reports combine borrower data from the nation’s three major credit bureaus and have become a flashpoint in the mortgage industry’s ongoing debate over credit reporting costs, competition, and underwriting standards.
HUD said implementation dates and additional guidance related to the new scoring models will be released later this year.
The Consumer Data Industry Association (CDIA) praised the decision to maintain the tri-merge framework.
“FHA made the right call. The tri-merge credit report exists for a reason — it promotes data accuracy, market competition, and investor confidence, and it protects borrowers by ensuring that lenders have the most complete picture of creditworthiness before making one of the most consequential financial decisions of a consumer’s life,” said Dan Smith, president and CEO of CDIA .
Smith added that the guidance reinforces the industry’s long-standing argument that broader credit data improves mortgage risk management.
“Today’s guidance confirms what CDIA has long maintained: more data, not less, is the foundation of a sound mortgage market,” Smith said. “Requiring tri-merge reports across all acceptable scoring models ensures consistency, reduces risk, and preserves the integrity of the credit evaluation process for lenders, investors, and borrowers alike.”
He also praised regulators for balancing modernization efforts with underwriting safeguards.
“We commend FHA and HUD for their commitment to prudent risk management and consumer protection, and we look forward to continued engagement as implementation guidance is developed later this year,” Smith said.
The FHA move follows a broader federal push to expand competition in mortgage credit scoring. Last month, the FHFA announced that a limited number of mortgages underwritten using VantageScore 4.0 would become eligible for delivery to Fannie Mae and Freddie Mac, opening the door to broader use of alternative scoring models in the conventional market.
The shift is already beginning to reach lenders. Last week, Rocket Mortgage said it had started using VantageScore 4.0 alongside Classic FICO in parts of its mortgage qualification process, another sign the industry is moving toward broader adoption of alternative scoring models.
The move also preserves a major victory for groups such as the Community Home Lenders of America (CHLA), which has argued that eliminating tri-merge reporting in favor of a single-bureau pull could increase risk and create opportunities for manipulation in federally backed lending programs.
The CHLA also praised FHA’s decision to retain the tri-merge framework as it rolls out new credit-scoring models.
“CHLA commends FHA for its intention to maintain the tri-merge requirement for 3 credit score pulls for approval of an FHA loan,” said Scott Olson, executive director for CHLA.
“As CHLA explained in detail in January, proposals for a single credit pull would have harmed both FHA and their borrowers — so FHA is doing the right thing here,” Olson added.
Earlier this year, CHLA published a policy paper warning that single-bureau credit pull proposals for federally backed mortgages could increase loan risk, create incentives to “game the system,” and potentially disadvantage FHA borrowers if the government-sponsored enterprises adopted single-pull standards while FHA maintained stricter requirements.
*This article was primarily written by a human author. AI tools were used in a limited capacity for research assistance or light editing.
