In DC: FICO’s big move; affordable housing goals shift 

Change is coming for the mortgage industry: FICO has announced a new program set to alter the way that credit scores are obtained, and the Federal Housing Finance Agency (FHFA) is proposing a new rule that some say would hinder affordable housing targets.

Meanwhile, the federal government shutdown entered its third day on Oct. 3, delaying a key jobs report economists use to gauge the health of the U.S. economy. As the stalemate dragged on, Housing and Urban Development (HUD) Secretary Scott Turner defended politicized language that was added to the department's website when the shutdown began.

FICO 'streamlines' credit score process

On Oct. 1, FICO unveiled FICO Mortgage Direct License Program, an initiative that seeks to cut the nation's three major credit bureaus out of the mortgage lending process. Instead of purchasing credit scores from Equifax, Experian or TransUnion, mortgage lenders can now buy directly from FICO.

The program aims to "drive price transparency" and provide "immediate cost savings to mortgage lenders, mortgage brokers, and other industry participants," according to a press release. Under the new model, FICO will charge a $4.95 royalty fee for a credit score, which the company said is a 50% price reduction "achieved by eliminating credit bureau mark-ups."

FHFA Director Bill Pulte, who previously criticized recent FICO cost increases, praised the move. "While their decision is a first step, it is appreciated," he wrote on X.

But a trade group representing credit bureaus and other consumer reporting agencies suggested FICO's new model will lead to higher costs in the long run.

"With this announcement, FICO has at least doubled its publicly disclosed prices year-over-year while introducing operational costs and risks to resellers and lenders," the Consumer Data Industry Association said in an Oct. 2 statement. "FICO's pricing proposal will also inevitably cause lenders to pass on significantly higher costs to consumers."

New affordable housing goals for Fannie, Freddie?

The FHFA has suggested changes to Fannie Mae and Freddie Mac's Affordable Housing Goals for 2026 through 2028. These affordable housing targets were first introduced in the early 1990s to expand mortgage access to low-income and underserved borrowers.

The proposed rule, which was published in the Federal Register on Oct. 2, would merge minority and low-income home purchase goals and lower the new proposed benchmark level for that combined group. The proposed revisions would heighten the difficulties working families face in securing a mortgage, according to the Consumer Federation of America (CFA).

"This new proposal will make our housing crisis worse and further limit access to homeownership, especially for first-time homebuyers," the CFA said in an Oct. 3 blog post.

The FHFA is accepting feedback on the rule proposal through Nov. 3.

HUD denies Hatch Act violations

After the Sept. 30 federal funding deadline passed without a deal, the HUD website began displaying language blaming Democrats for the government shutdown.

"The Radical Left in Congress shut down the government," the message reads. "HUD will use available resources to help Americans in need."

The location of the message, which remains on the website as of Oct. 3, raised concerns among some politicians and ethics groups, who suggested the wording may violate the Hatch Act. The law limits the kinds of political activities that federal employees can engage in while at work.

But Turner has defended the messaging. "The change to HUD's website is not about 'propaganda' or whatever deflection the media wants to use," he wrote in an Oct. 2 post on X. "It's about informing the American people of the consequences of the Radical Left's shutdown."

NAR warns against prolonged shutdown

"Each day that passes during the shutdown, potential real-life impacts will be felt in America's housing market," said Shannon McGahn, executive vice president and chief advocacy officer at the National Association of Realtors.

The lapse in authorization for the National Flood Insurance Program (NFIP) that coincided with the shutdown is of particular concern for home sales in flood-prone areas. NAR said it is working with lawmakers to urge a speedy reopening so that the NFIP can be reauthorized.

"This is about keeping real estate transactions moving and ensuring families have the stability and protection they deserve," McGahn said.