FHFA says Fannie, Freddie will use one LLPA grid for FICO and VantageScore
Change follows lender feedback after VantageScore 4.0 was approved for eligible conventional loans earlier this month
The Federal Housing Finance Agency's announcement that Fannie Mae and Freddie Mac will use a single loan-level price adjustment grid for both FICO and VantageScore is a welcome development for construction lenders. This change streamlines the pricing process, reducing complexity and confusion for lenders who originate conventional loans.
The move follows the FHFA's approval of VantageScore 4.0 for use in eligible conventional loans earlier this month. By using one LLPA grid, Fannie and Freddie are making it easier for lenders to compare prices and make informed decisions. This is particularly important for construction lenders, who often rely on these government-sponsored enterprises for financing. With a single grid, lenders can more easily navigate the mortgage market and focus on originating loans that meet the needs of homebuyers and builders.
As the construction industry continues to navigate supply chain disruptions and labor shortages, access to affordable financing remains a top priority. With this change, construction lenders can expect to see more efficient and transparent pricing from Fannie and Freddie. What's next to watch is how this change affects mortgage rates and loan terms for construction projects, and whether other mortgage stakeholders, such as banks and private lenders, follow suit with similar pricing adjustments.
Originally reported by housingwire.com. ConstructionNews adds analysis for real estate & property readers.