THE FEDERAL HOME LOAN BANK OF NEW YORK (FHLBNY) NOW ACCEPTS MORTGAGE COLLATERAL USING VANTAGESCORE 4.0

Expanding mortgage collateral options for FHLBNY members will provide additional resources to originate more loans for diverse and underserved borrowers

SAN FRANCISCO, Oct. 28, 2024 /PRNewswire/ -- The Federal Home Loan Bank of New York and VantageScore announced today that members of the Federal Home Loan Bank of New York ("FHLBNY") can now pledge mortgage collateral using VantageScore 4.0 credit scores, which considers rental payments and other data points that are not included in traditional scoring models. VantageScore 4.0 expands the number of diverse and creditworthy mortgage applicants and creates more opportunities across the region to help narrow the racial homeownership gap.

In August 2024, Reps. Torres and Meeks formally requested that the FHLBNY consider accepting mortgage collateral originated using alternative credit scores such as VantageScore to expand homeownership opportunities across the FHLBNY's District. In response, the FHLBNY initiated a review of its ability to incorporate VantageScore 4.0 into its collateral processes, and today's announcement marks the culmination of this effort to offer this option to its membership of more than 330 local lenders.

"In partnership with Congressman Meeks, I persuaded the Federal Home Loan Bank of New York to agree to provide liquidity for mortgages that had originated on the basis of a credit score that includes alternative data like rent payments. The decision by the Federal Home Loan Bank of New York to recognize Vantage Score 4.0 lays a critical foundation for broad base wealth creation in America," said Congressman Ritchie Torres. "I have constituents who have reliably paid their rent in full and on time for decades, and yet none of their rental history is taken into account by conventional credit scoring. The inclusion of alternative data like rent payments in credit scoring is a simple, sensible policy change that will revolutionize access to credit for the lowest income families."

"I remain committed to creating more wealth building opportunities for the people of Southeast Queens, and homeownership is the best route to do so," said Congressman Gregory W. Meeks. "My family's own experience is a personal attestation to the importance of home ownership. By allowing for the use of VantageScore 4.0 credit scores, the Federal Home Loan Bank of New York is broadening opportunity and ensuring that people who have been traditionally left out will have the ability to begin their homeownership journeys. Addressing racial homeownership disparities is a key step in bridging the wealth gap and I commend the FHLBNY for taking this important step."

"The Federal Home Loan Bank of New York is grateful to Representatives Ritchie Torres and Gregory Meeks for their continued efforts to address housing affordability across New York and throughout our District, and for their focus on ensuring that the FHLBNY remains best positioned to meet the needs of the communities we all serve," said José R. González, President and CEO of the Federal Home Loan Bank of New York. "We are excited to incorporate VantageScore 4.0 into our collateral practices, providing another tool for our cooperative to support inclusive housing and community development efforts throughout our region."

FHLBNY member banks include some of the largest financial institutions in the world, including Citibank, Goldman Sachs Bank USA, Morgan Stanley Bank, First New York Federal Credit Union, New York Community Bank, HSBC, and many more.

The FHLBNY joins the Federal Home Loan Banks of Chicago and San Francisco in accepting mortgage collateral originated using VantageScore 4.0. In October 2022, the Federal Housing Finance Agency – regulator of the Federal Home Loan Bank System – announced its approval of VantageScore 4.0 for Fannie Mae and Freddie Mac. VantageScore estimates that using the VantageScore 4.0 credit model will result in approximately 33 million more consumers nationwide having access to a credit score that may aid them in obtaining a mortgage. This includes an estimated 3.1 million consumers within the FHLBNY's District, which comprises New York, New Jersey, Puerto Rico and the U.S. Virgin Islands.

"The Federal Home Loan Bank of New York's decision to accept mortgage collateral backed by VantageScore is a significant step forward in expanding access to homeownership for creditworthy individuals, particularly in underserved communities," said Silvio Tavares, President and CEO, VantageScore. "By addressing the long-standing disparities in mortgage lending, this initiative supports our shared goal of narrowing the homeownership gap in communities of color while ensuring financial stability and inclusion for all."

Broad Community Support

Through the first 10 months of 2024, the FHLBNY has made $135 million in affordable housing and community support available through multiple programs:

• $70.8 million in grant funding through its 2024 Affordable Housing Program Round
• $28.9 million in grant funding through its 2024 Homebuyer Dream Program® ("HDP®") Round
• $10.3 million in grant funding through inaugural HDP Plus Round
• $15 million in interest rate credits through its 2024 0% Development Advance Program
• $5 million in supplemental credits for low-to-moderate income mortgages sold into its Mortgage Asset Program
• $5 million in grant funding through its 2024 Small Business Recovery Grant Program Round

These programs are funded directly by the FHLBNY's earnings and are incorporated into its strategy, reflecting the FHLBNY's continuing commitment to strengthening the communities it serves. The FHLBNY makes its broadest impact through the execution on its foundational liquidity mission, through which it provides its members with a stable source of liquidity to facilitate the extension of credit to consumers, communities, and small businesses across its region.

Federal Home Loan Bank of New York
The Federal Home Loan Bank of New York is a Congressionally chartered, wholesale Bank. It is part of the Federal Home Loan Bank System, a national wholesale banking network of 11 regional, stockholder-owned banks. As of June 30, 2024, the FHLBNY serves 337 financial institutions in New Jersey, New York, Puerto Rico, and the U.S. Virgin Islands. The mission of the FHLBNY is to provide members with reliable liquidity in support of housing and local community development.

About VantageScore®

VantageScore is the fastest-growing credit scoring company in the U.S., and is known for the industry's most innovative, predictive, and inclusive credit score models. In 2023, usage of VantageScore increased by 42% to more than 27 billion credit scores. More than 3,400 institutions, including 8 of the top 10 banks, use VantageScore credit scores to provide consumer credit products including credit cards, auto loans, personal loans and mortgages. The VantageScore 4.0 credit scoring model scores 33 million more people than traditional models. With the FHFA mandating the use of VantageScore 4.0 for Fannie Mae and Freddie Mac guaranteed mortgages, the company is also ushering in a new era for mortgage lending and helping to close the homeownership gap.

VantageScore is an independently managed joint venture company of the three Nationwide Consumer Reporting Agencies (NCRAs) – Equifax, Experian, and TransUnion. 

SOURCE VantageScore