ML 2026-11 Explained: FICO 10T, VantageScore 4.0, and FHA's Minimum Decision Credit Score
The Methodology Change
Mortgage Letter 2026-11 updates how FHA calculates the Minimum Decision Credit Score, effective for case numbers assigned on or after January 1, 2027. Up to now, FHA lenders have relied on Classic FICO scores pulled from the three national repositories. ML 2026-11 adds two additional scoring models to the mix: FICO 10T and VantageScore 4.0. Lenders will be permitted to consider scores generated by these models alongside, not instead of, Classic FICO when determining a borrower's Minimum Decision Credit Score.
Why This Matters: The Thin-File Problem
Classic FICO requires a certain depth of traditional tradeline history, generally revolving credit like credit cards or installment loans like auto financing, to generate a reliable score. Borrowers without that history often come back with no score at all, regardless of how consistently they've paid rent, utilities, or other recurring obligations. FICO 10T and VantageScore 4.0 are both built to incorporate a broader data set, including trended credit behavior and, in many implementations, rent and utility payment history where it's reported. That's the gap this update is designed to close.
Consider a borrower like Samantha, used here as an illustrative example: six years of on-time rent and utility payments, no credit cards, no auto loan. Classic FICO has nothing to work with. A model built to read a wider range of payment data has a real chance of reflecting her actual reliability.
What Does Not Change
This is the part worth repeating clearly: FHA's minimum qualifying score thresholds are not changing under this update, and down payment requirements are not changing either. ML 2026-11 is a methodology update, not a standards relaxation. Lenders are being given a wider set of tools to measure the same bar borrowers have always had to clear. If a borrower's history reflects real credit risk, a different scoring model isn't going to erase that.
Practical Implications for Borrowers
If you're a borrower with a thin credit file, meaning little or no revolving credit, but a consistent history of on-time rent and utility payments, this update is worth tracking. Start documenting that payment history now: lease agreements, rent payment records, utility statements showing on-time payment over an extended period. When lenders begin incorporating FICO 10T and VantageScore 4.0 into their FHA underwriting after January 1, 2027, having that documentation ready puts you in a stronger position from day one.
It's also worth having a conversation with a mortgage professional before that date so you understand where you stand under the current methodology versus where you might stand once the new models are in use.
Questions Worth Asking Your Lender
When this rolls out, ask your loan officer directly which scoring models they're pulling and whether your file would benefit from the alternative models under ML 2026-11. Not every lender will implement this the same way on day one, so it's reasonable to ask specifically.
If you've got questions about how this update might apply to your specific credit picture, I'm glad to walk through it with you.
Jason Sharon, Mortgage Broker, Home Loans Inc. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.