The


Federal
Home
Loan
Bank
of
Chicago
(FHLBank
Chicago)
and
consumer
credit
scoring
system


VantageScore
announced
on
Tuesday
that
the
bank
is
now
accepting
mortgage
collateral
using
VantageScore
4.0,
an
updated
version
of
the
scoring
system
using
trended
credit
bureau
data.

“[M]ember
financial
institutions
can
now
pledge
mortgage
collateral
using
VantageScore
credit
scores
as
an
alternative
to
the
Classic
FICO
credit
score
model,”
the
announcement
said.
“By
considering
rental
payments
and
other
consumer
credit
data
in
its
scoring
algorithms
that
are
not
included
in
traditional
scoring
models,
VantageScore
provides
an
innovative
solution
aimed
at
expanding
access
to
support
sustainable
homeownership.”

VantageScore
claims
that
the
4.0
system
scores
33
million
more
people
than
more
traditional
credit
scoring
models,
including
2.4
million
more
people
served
by
the
FHLBank
Chicago
district
encompassing

Illinois
and

Wisconsin.

This
transition
is
said
to
build
on
other
recent
efforts
by
FHLBank
Chicago
to
expand
the
availability
of
mortgage
financing.

This
year,
the
bank
“increased
the
maximum
per
member
limit
available
for
its
Downpayment
Plus
(DPP)
grant
program,
a
downpayment
assistance
program,
to
$1
million
per
member,”
the
bank
said.
It
also
“increased
the
maximum
grant
per
project
to
$2
million
through
its
Affordable
Housing
Program
(AHP)
General
Fund,
forgivable
grants
that
subsidize
the
acquisition,
new
construction,
and
rehabilitation
of
affordable
rental
or
owner-occupied
housing”
among
other
initiatives.

In
late
2022,
the


Federal
Housing
Finance
Agency
(FHFA)

announced
that
it
would
replace
the
Classic
FICO
credit
model
—
which


Fannie
Mae
and


Freddie
Mac
have
relied
on
for
roughly
20
years
—
with
new
models
(FICO
10T
and
VantageScore
4.0)
that
use
trended
credit
bureau
data.

Since
then,
there
have
been
a
number
of

delays
and
challenges
in
completing
these
changes.
Mortgage
companies,

trade
groups
and
lawmakers
have
increasingly
scrutinized
the
implementation
timeline.

In
May,

VantageScore released
a
pilot
of
its
latest credit-scoring
model,
VantageScore
4
Plus,
for
banks,
fintechs
and
government
lenders.

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