The Credit Report Change That Could Unlock Homeownership for Millions of Americans

The way mortgage lenders pull your credit is about to change — and if the FHFA gets its way, the shift could bring a meaningful number of sidelined borrowers back to the table.

The Federal Housing Finance Agency is preparing to direct Fannie Mae and Freddie Mac to accept two-bureau credit reports instead of the traditional tri-merge. Right now, virtually every conventional mortgage underwritten to Fannie or Freddie guidelines requires a full tri-merge report — data pulled simultaneously from Equifax, Experian, and TransUnion. The FHFA’s expected directive would allow lenders to qualify borrowers using reports from just two of the three bureaus. That sounds like a small technical tweak. It isn’t.

What the Tri-Merge Requirement Actually Costs Borrowers

Here’s the thing about a tri-merge: it’s expensive, and not just in dollars. The cost of pulling three separate credit reports gets baked into loan origination costs, and lenders pass that along. More importantly, the tri-merge requirement has quietly excluded borrowers who have limited — or uneven — credit footprints across the three bureaus.

A first-generation homebuyer in Maryvale or a young professional renting in Tempe may have solid payment history showing up at two bureaus but a thin or incomplete file at the third. Under the current system, that can drag their usable score down or complicate underwriting. The two-bureau model addresses that directly.

As of recent market data, roughly 26 million Americans are considered “credit invisible” or have unscorable files under traditional models. Even among those who do have scores, a meaningful subset carry different profiles across bureaus — sometimes due to how long they’ve had accounts, which creditors report to which bureau, or past disputes that haven’t resolved uniformly. Dropping the third pull removes a barrier that never had much analytical justification in the first place.

Why the FHFA Is Moving on This Now

This doesn’t come out of nowhere. The agency has been on a multi-year push to modernize credit evaluation standards, which also included the acceptance of VantageScore from any lender for Fannie and Freddie loans. That was a significant shift from the longtime FICO monopoly on GSE-backed mortgages. The two-bureau move follows the same logic: broader data inputs, more borrowers served, without a measurable increase in default risk.

The FHFA’s own research — and independent analysis from mortgage industry groups — suggests that two-bureau reports produce credit scores that correlate closely enough with tri-merge scores that the additional pull adds cost without adding much predictive power. Lenders still use the middle score from among the three bureaus in conventional underwriting. If two bureaus produce comparable scores, the third bureau’s data is often redundant.

There’s also a cost angle that matters in today’s market. Reducing report costs, even modestly, chips away at overall loan origination expenses. Every dollar counts when you’re looking at buyers trying to stretch budgets in a market where median Phoenix metro home prices have been hovering in the low-to-mid $400,000s.

What This Means for Arizona Buyers

For the Phoenix metro specifically, this change matters for a few reasons.

First, Arizona has a significant population of first-time buyers and first-generation buyers — households that have historically been underrepresented in the homeownership data. The East Valley, West Phoenix neighborhoods like Laveen and Goodyear, and outer suburbs like Queen Creek have all seen strong demand from exactly this demographic. Any policy that lowers the friction on credit qualification expands the funnel.

Second, Arizona’s new construction market is heavily oriented toward entry-level and move-up product, where financing hurdles matter most. Builders and their preferred lenders will adapt fast to the two-bureau standard if it’s finalized.

Third, the timing is relevant. Rates have moderated somewhat from their 2023 peaks, but affordability remains compressed. Mortgage affordability has shown some improvement as median payments edge lower, but the pool of qualified buyers hasn’t expanded enough to meaningfully loosen competition. A credit policy change that unlocks even 5–10% more eligible borrowers has real market impact.

Here’s a quick look at how the two-bureau model stacks up against the current tri-merge standard:

What Lenders and Buyers Should Do Right Now

The FHFA hasn’t issued a final rule yet. Lenders are in a wait-and-see posture, and some are already positioning their compliance teams. If you’re a buyer who’s been on the edge of qualifying — maybe your scores are solid at two bureaus but your file at the third is thin or has an unresolved issue — this is the moment to get your documentation in order and keep an eye on your credit across all three bureaus.

A few practical steps worth taking now:

1. Pull your free credit reports from all three bureaus at AnnualCreditReport.com and compare them side-by-side.
2. Identify any discrepancies or accounts that report to one bureau but not others.
3. If you’ve had disputes sitting unresolved at one bureau, escalate them now — don’t wait for a lender to surface the issue.
4. Talk to a mortgage professional who works with conventional Fannie/Freddie products and ask them explicitly how they’re preparing for the two-bureau transition.

The lender relationship matters more than many buyers realize. Data shows that a significant share of homebuyers are willing to walk away from a mortgage lender who doesn’t meet their expectations — and the lenders who get ahead of policy changes tend to earn and keep trust.

The direction here is clear. The FHFA is steadily dismantling outdated underwriting guardrails that cost borrowers more than they protect lenders. The two-bureau directive, when it’s finalized, will expand access. In a market like greater Phoenix — where affordability is still a daily conversation — that’s not a minor update. It’s a meaningful step forward.