The Federal Housing Administration is opening the door to newer credit scores in 2027, potentially giving some Raleigh and Triangle homebuyers a different way to qualify for a mortgage.
A renter with years of on-time payments might receive a higher score under one of the newer models. Yet that same borrower could still have an FHA application evaluated using a lower score.
And for buyers who need North Carolina down-payment assistance, another number matters: 640.
On October 8, FHA issued Mortgagee Letter 2026-11, authorizing lenders to use VantageScore 4.0 and FICO 10T alongside the longstanding Classic FICO model. The newer models examine credit behavior over time and can incorporate additional information, including certain reported rent and utility payments.
The policy takes effect for FHA case numbers assigned on or after January 1, 2027. The case-assignment date controls, not the closing date. Lenders may use the newly permitted models, but they aren't required to switch every FHA application to one on January 1.
For buyers hoping a different credit score will improve their options, the way FHA handles competing scores deserves a closer look.
Why FHA May Use the Lower Score From Competing Models
Consider a hypothetical Raleigh renter preparing to buy a home.
The borrower's selected Classic FICO mortgage score is 622. Under VantageScore 4.0, it's 655.
That 33-point improvement looks promising. The higher number even clears the 640 minimum published for North Carolina's Home Advantage Mortgage program.
But FHA's new policy doesn't tell lenders to use whichever model produces the highest score.
If the lender submits both Classic FICO and VantageScore 4.0, FHA's updated methodology uses the lower selected model score for that borrower. In this example, 622 wins out over 655.
A lender can submit just one approved model or multiple models. For each model submitted, it first selects the middle score when three different credit-bureau scores are reported, the lower of two, or the sole score when only one is reported. If multiple models are submitted, the lowest selected model score becomes the borrower's score.
For a joint application, FHA uses the lowest borrower-level score to determine the transaction's minimum decision credit score. The same submitted model types must be used for every borrower on the loan.
FHA also continues to require a three-bureau credit report. Getting scores from multiple credit bureaus and using multiple scoring models are two different steps.
A lender submitting only an approved newer model could reach a different result from one submitting both new and old models. The buyer needs to know what the lender will actually submit, not merely which scores appear on a credit report.
FHA hasn't changed its underlying score thresholds, either.
A minimum decision score of 580 or higher remains eligible for maximum FHA financing, which can mean a down payment as low as 3.5% for qualifying buyers. Scores from 500 through 579 are limited to 90% loan-to-value, generally meaning a down payment of at least 10%. Neither figure includes other closing costs. A score below 500 is ineligible under the scored rule, while separate manual-underwriting provisions address borrowers without conventional credit scores.
Qualifying for maximum financing doesn't mean automatic mortgage approval. Income, debt, credit history and other underwriting requirements still matter.
Now add North Carolina down-payment assistance to that same purchase.
FHA's 580 Threshold Doesn't Replace North Carolina's 640 Rule
The NC Home Advantage Mortgage program provides eligible first-time and repeat buyers with fixed-rate mortgages and down-payment assistance of up to 3% of the loan amount. FHA is among the eligible mortgage types.
For a Triangle buyer who can manage the monthly mortgage payment but needs help with upfront costs, that assistance may be an important part of the purchase.
North Carolina, however, has its own underwriting requirements.
Under Section 5.6 of the July 2026 NC Home Advantage Mortgage program guide, every borrower must have at least two credit-bureau scores. The lower of two or middle of three must be at least 640, and the loan must receive an acceptable automated underwriting recommendation. Section 10.2 of the same guide expressly calls for a mid or low FICO credit score of 640 or higher, again requiring at least two scores per borrower.
The agency also excludes borrowers with only one score, no credit score or nontraditional credit histories used instead of qualifying scores. Its published consumer requirements specify a higher 660 minimum for manufactured homes.
Return to the Raleigh buyer with a 622 Classic FICO score and a 655 VantageScore.
Both numbers exceed FHA's 580 threshold for maximum financing. But if the score applicable under North Carolina's program is 622, the buyer falls short of its 640 requirement.
What if the lender uses only VantageScore 4.0 and the buyer qualifies under FHA at 655?
That still doesn't settle the assistance question. FHA's authorization of a new scoring model does not automatically establish that North Carolina's program accepts it. The July 2026 guide's FICO wording doesn't resolve whether VantageScore 4.0 or FICO 10T will be accepted for assistance-qualified FHA loans under the new policy.
A participating lender must confirm which score the state program will use, whether its separate two-score requirement is met, and whether the loan meets the remaining program conditions.
An FHA borrower who qualifies through a separate manual-underwriting process without traditional credit scores also shouldn't assume that qualification carries over to Home Advantage.
North Carolina's assistance comes with repayment conditions. It is forgiven gradually at the end of years 11 through 15, and repayment can be required if the home is sold, refinanced or transferred before full forgiveness.
For buyers considering homes inside Raleigh or Durham, there may be still another set of requirements.
Raleigh and Durham Assistance Programs Add Different Conditions
The City of Raleigh offers homebuyer assistance of its own, including programs that can help with a down payment, closing costs or a financing gap.
According to the city's September 4, 2026 guidance, its traditional assistance program covers eligible properties within Raleigh city limits. Enhanced assistance is available in designated geographic areas.
Both programs serve eligible first-time homebuyers whose household incomes do not exceed 80% of the applicable area median income, along with other purchase and program conditions.
Raleigh also explicitly encourages eligible buyers to investigate combining city assistance with North Carolina Housing Finance Agency programs through approved lenders.
That makes the property's location part of the financing conversation.
A Raleigh mailing address doesn't necessarily place a home inside city limits. Even a qualifying home within Raleigh may fall outside the designated area for enhanced assistance.
A buyer comparing two otherwise suitable properties could therefore find that one qualifies for a local assistance option that the other does not.
And combining programs doesn't override the credit, income, underwriting or repayment requirements attached to each one. Raleigh's assistance is provided through deferred, zero-interest loans subject to program conditions.
Durham introduces a different credit question.
Under Section 4.2.1 of the City of Durham's April 16, 2026 down-payment-assistance guidelines, participating lending institutions determine credit-score requirements. The city also excludes nontraditional credit documentation, including utility and furniture-rental payment histories.
That may sound contradictory to FHA's willingness to accept newer models that can consider additional payment information.
The distinction is how the information is used.
Submitting utility bills as separate evidence of creditworthiness is not necessarily the same as qualifying with an approved mortgage credit score that already incorporates reported payment history.
Durham's published rule does not establish that the city rejects VantageScore 4.0 or FICO 10T. It does mean a borrower should confirm the participating lender's scoring requirements and the city's program conditions rather than assume the federal change answers both questions.
Why On-Time Rent Payments May Not Improve a Mortgage Score
The possibility of including rental-payment history is one reason FHA's announcement could matter to renters across the Triangle.
Someone who has consistently paid rent but has limited experience with credit cards or installment loans may have a financial history that isn't fully represented by a traditional mortgage credit score.
VantageScore 4.0 and FICO 10T can consider additional credit information and trends. That may give lenders another way to evaluate certain borrowers.
But paying rent on time is only part of the equation.
The information has to reach the relevant credit-reporting system in a form the scoring model can use.
A renter might have five years of perfect payments without those payments appearing in the credit reports used to calculate a mortgage score. Landlords don't all participate in rental-reporting programs, and reported information can vary.
The Consumer Financial Protection Bureau explains that positive rental payments can help build credit. It recommends asking a landlord whether payments are reported and checking for any fees associated with the service.
Even reported payments won't necessarily raise a mortgage score. The result depends on the model, the information available and the rest of the borrower's credit history.
That's worth checking before anyone bases a homebuying plan on the expectation that a new model will reward years of timely rent.
There is another wrinkle for Triangle buyers comparing FHA financing with conventional mortgages.
Conventional Mortgages Are Already Following a Different Schedule
FHA's January 2027 implementation isn't the starting date for every mortgage credit-scoring change.
According to the Federal Housing Finance Agency's October 2, 2026 update, VantageScore 4.0 became available to all approved Fannie Mae and Freddie Mac lenders for eligible conventional loans on September 9, 2026.
Classic FICO remains available. FICO 10T was not yet eligible for delivery to those agencies under that update.
That means a borrower comparing conventional and FHA loans could encounter different scoring-model options before the FHA change takes effect.
Neither policy requires every lender to use the newest permitted model. The lender's implementation, the mortgage product and the applicable underwriting rules remain critical.
A buyer shouldn't assume that waiting until January automatically produces a better score, a lower interest rate or more purchasing power.
What to Ask Before Counting on a Higher Score
For a Triangle buyer planning a purchase around the beginning of 2027, the useful first step is to find out what information the lender will actually use.
Start by reviewing credit reports for errors and checking whether positive rental-payment history appears. The CFPB explains that credit scores can influence mortgage eligibility and borrowing costs, while other factors such as debts, income and savings also affect lending decisions.
When speaking with a lender, ask which credit-scoring model or models will be submitted for the proposed FHA loan, what score would determine eligibility, and whether the lender expects to use the new options for case numbers assigned beginning January 1.
If the purchase depends on NC Home Advantage assistance, ask the participating lender to verify which score the program accepts and whether the borrower meets its separate credit and underwriting requirements.
For Raleigh or Durham assistance, the lender should also confirm the property's geographic eligibility, applicable program conditions and whether multiple forms of assistance can actually be combined.
Then compare the financing with and without assistance. The interest rate, monthly payment, cash needed at closing and any assistance repayment obligation matter alongside the credit score.
Our guide to first-time homebuyer programs in Raleigh covers those assistance and loan-term comparisons in greater detail.
FHA's October 8 decision gives lenders more credit-scoring options beginning in 2027. It may improve the financing possibilities for some buyers without changing the outcome for others.
For the Raleigh renter comparing a 622 with a 655, the difference is certainly worth investigating.
But before building a down-payment plan around the higher number, the buyer needs to know whether the lender will use it—and whether the assistance program needed to complete the purchase will accept it.
Conceptual illustration about mortgage credit requirements. No actual credit report, loan offer or approval is shown.