Fannie-Freddie seller and servicer Cardinal Financial has originated its first VA loans decisioned with the help of FICO’s 10 T credit score, following early adoption of this new credit score ahead of the transition required by the Federal Housing Finance Agency (FHFA) in late 2025.
Moreover, on Nov. 25, 2024, Cardinal formed and traded the first government-issued mortgage-backed security (MBS) pool featuring loans decisioned by FICO’s 10 T score, entirely comprised of non-agency VA loans, according to a FICO press release announcing the “significant milestone in housing finance.”
Ahead of the mortgage industry's transition to adopting trended credit score models, the FHFA has solicited industry engagement on its credit modernization efforts. Panelists at the Mortgage Bankers Association's (MBA) annual conference, held this year in Denver in late October, agreed that that the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, who are regulated by the FHFA, have neglected to help facilitate this mandatory adoption.
“Today’s announcement underscores Cardinal’s role as a leader in rethinking how we measure and manage credit risk,” said Michael Gaines, senior vice president of Capital Markets at Cardinal Financial, in the press release. “We’re not only improving credit risk transparency for investors but also expanding homeownership opportunities for veteran and military borrowers.”
More than 21 mortgage lenders nationwide have adopted the 10 T score for non-GSE loans. It is considered a more predictive credit score, in that it provides a trended view of consumer credit history over time, rather than the ‘snapshot’ that traditional credit scores offer.
Cardinal was an early adopter of FICO’s 10 T credit score for non-agency loans, deploying the “more predictive” model to originate VA loans in Oct. 2024. According to the press release, “Cardinal reports that the majority of borrowers received higher credit scores, allowing more favorable loan terms to be offered with no observable increase in credit risk to the lender.”
“We are thrilled to see FICO Score 10 T at the heart of this milestone security,” said Joe Zeibert, vice president of Mortgage and Capital Markets at FICO. “We encourage mortgage investors to consider the advantages of incorporating FICO Score 10 T into their models.”
