On this page
Fannie Mae’s Selling Guide now allows lenders to qualify manually underwritten loans with VantageScore 4.0. Fannie Mae made the change in Selling Guide Announcement SEL-2026-10, dated November 4, 2026. However, as of November 9, 2026, Fannie Mae’s credit score models page still says manual loans must use Classic FICO, so lenders may not offer it yet.
What changed for VantageScore 4.0 at Fannie Mae
The update sits in Selling Guide section B3-5.1-01. Before it, lenders could use VantageScore 4.0 only on loans run through Desktop Underwriter (DU), Fannie Mae’s automated system. The announcement extends it to manually underwritten loans. It also writes into the guide the DU Version 12.1 files that have accepted VantageScore 4.0 since September 9, 2026.
| Loan path | Score models the Selling Guide allows, as of November 9, 2026 |
|---|---|
| DU loan casefile | Classic FICO or VantageScore 4.0 |
| Manually underwritten loan | Classic FICO or VantageScore 4.0 (added November 4, 2026) |
Manual underwriting means an underwriter checks the file against the Selling Guide’s written rules instead of relying on a DU approval. For example, a lender may underwrite by hand after DU returns a “Refer with Caution” result, if the loan type allows manual underwriting.
Some rules stay in place. The lender must pull all three bureau scores from one model for each borrower, and every borrower on the loan must use the same model. In addition, manually underwritten loans still have a 620 floor for a fixed rate and a 640 floor for an adjustable rate. Fannie Mae’s Eligibility Matrix often sets a higher minimum, based on the loan’s details. Exceptions include loans where no borrower has a score.
How VantageScore 4.0 differs from Classic FICO
According to FHFA’s credit score page, the newer models consider more data, including rent payment history. VantageScore says its models use rent and utility payments when those are reported to the three credit bureaus. It also says the 4.0 model uses trended credit data, which looks at credit behavior over time.
Who can use VantageScore 4.0 now
The change applies to conventional loans sold to Fannie Mae. SEL-2026-10 does not mention VA or USDA loans, which follow their own agencies’ rules. FHA runs on its own schedule: HUD Mortgagee Letter 2026-11 adds VantageScore 4.0 for case numbers assigned on or after January 1, 2027.
Keep these limits in mind:
- The lender chooses the model. FHFA says lenders decide which model, Classic FICO or VantageScore 4.0, to use on each loan. A borrower can ask, but the lender decides.
- Overlays can apply. A lender may keep stricter rules than Fannie Mae, or stay with Classic FICO.
- Manual files are mainly primary homes. Under section B2-1.1-01, second homes and investment properties must get a DU Approve/Eligible result. The only exception is a high-LTV refinance, and Fannie Mae has suspended buying those loans.
- Pricing is aligned. On September 30, 2026, Fannie Mae and Freddie Mac published upfront fee adjustments so the two models are priced on a consistent basis.
Owner-occupancy rules, spelled out
SEL-2026-10 also aligns the Selling Guide’s occupancy wording with the mortgage documents borrowers sign. Fannie Mae calls this a clarification of existing policy, and it took effect at once.
For a principal residence, the borrower must move in within 60 days of signing the security instrument. After that, the borrower must live there for at least one year, unless the guide or the security instrument permits otherwise.
Meanwhile, a second home must be a one-unit home suitable for year-round use. The borrower must use it for part of the year and keep exclusive control of it. It cannot be primarily used or operated as a rental, and no management firm can control who stays there.
If a property fails both tests, including a home primarily held as a rental, it counts as an investment property. The announcement lists no new paperwork for borrowers.
Condo units with an accessory dwelling unit can now qualify
Fannie Mae now treats a condo unit with one accessory dwelling unit (ADU) as an eligible property type. An ADU is a separate living space with its own living, sleeping, cooking and bathroom areas. Lenders can use this change immediately.
Under section B2-3-04, the ADU must meet the general ADU rules, such as its own entrance and kitchen. It must also meet four added conditions:
- The condo project’s governing documents expressly permit it.
- The ADU sits on the same parcel as the main condo unit.
- Both secure the same loan, under the same security instrument.
- The ADU cannot be sold, financed or owned apart from the main unit.
In addition, section B4-2.1-03 now says a unit with one ADU is not a banned multi-dwelling unit.
What to do now about VantageScore 4.0
- Ask which score model the lender uses. If you are applying for a conventional loan, ask whether the lender pulls VantageScore 4.0 or Classic FICO. Our guide to the credit score to buy a house lists typical minimums.
- Ask about manual underwriting. If DU does not approve your file, ask whether the lender accepts VantageScore 4.0 on manual reviews yet. This matters most with a thin file or reported rent history. See our guide to a mortgage with bad credit for other options.
- Check condo documents. If the condo has an ADU, ask the lender to confirm the governing documents permit it before the appraisal. Our condo mortgage guide explains project review.
