Written By: Joel Palmer, Op-Ed Writer
As new President Donald Trump tapped a new director for the Federal Housing Finance Agency (FHFA), the agency has hit the brakes on a major initiative.
Trump announced a few days before his January 20 inauguration that he was nominating Bill Pulte to lead FHFA. If confirmed by the Senate, he would replace Sandra Thompson, who resigned just prior to Inauguration Day.
Pulte founded and runs a private equity firm, Pulte Capital Partners LLC, which focuses on housing products. He also founded the Detroit Blight Authority, a nonprofit organization that helps clean up neighborhoods in the Detroit area, where is grandfather William Pulte founded a homebuilder in the 1950s.
“While Bill isn’t well known in Washington, we worked together in Detroit and I can say firsthand he is passionate about affordable housing and community development, as well as deeply knowledgeable about the housing market and homebuilding industry,” said David M. Dworkin, President and CEO of the National Housing Conference. “When Detroit was at its lowest point during the bankruptcy in 2013, Bill came home to work in communities hardest hit by the foreclosure crisis. I expect he will be an important voice in the Trump Administration’s efforts to bring down the cost of homeownership and make all housing more affordable.”
Several executives in the housing industry lauded the appointment of somebody with experience in the sector.
“As a businessman and philanthropist, Pulte firmly understands the importance of housing and the role of private capital in the housing finance system,” said Seth Appleton, President of U.S. Mortgage Insurers (USMI).
“As a businessman and philanthropist with strong ties to the home building industry, Pulte understands the vital need to ensure that builders and developers have access to finance new housing and that consumers can readily obtain affordable mortgage credit,” added Carl Harris, chairman of the National Association of Home Builders (NAHB).
Pulte will have a number of priorities to oversee if confirmed, most notably helping to direct the transition of Fannie Mae and Freddie Mac out of conservatorship.
Another transition occurring within the agency is updating the current credit report requirements for mortgage eligibility and credit score model.
FHFA is in the midst of replacing the Classic FICO credit score with FICO 10T and VantageScore 4.0. The transition to the new models also includes changing the requirement for three credit reports to only two credit reports for single-family loan acquisitions by Fannie Mae and Freddie Mac.
Both transitions were expected to occur in the fourth quarter of 2025. However, the latest timeline says the new date for incorporating both initiatives is “to-be-determined.”
“This update is being made in response to industry feedback and to better support market participants with this transition,” read a statement found on transition pages on Fannie Mae’s and Freddie Mac’s websites. “We remain committed to working closely with all industry stakeholders to ensure the market has time to plan for and understand the transition. Additional implementation and timing details will be provided as soon as they are available.”
In October 2022, FHFA announced the validation and approval of the FICO 10T and VantageScore 4.0 credit score models for use by the enterprises to replace the Classic FICO model. In February 2024, the agency said new crediting reporting requirements and new credit score models would occur in the fourth quarter of this year. This occurred nearly a year after FHFA said the new credit reporting requirements could happen as soon as the first quarter of 2024.
FHFA said it will continue to seek feedback on both initiatives at stakeholder forums.
“FHFA and the GSEs are committed to engaging with a wide range of stakeholders in the housing finance system,” read a statement in the latest Partner Playbook. “This new phase of public engagement builds on the feedback collected in 2023 and the first half of 2024 and provides a forum for continued identification of a wide variety of issues, opportunities, and challenges.”
Interested parties who wish to participate in the upcoming forums should send their name, affiliation, and contact information to CreditScores@fhfa.gov.
About the Author
As an NAMP® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
