Earlier this month, Fannie Mae announced that rent payments will now be considered when evaluating a potential borrower’s credit for a loan. For all of those perfect renters making consistent payments, this is great news!
According to Fannie Mae, their underwriting will only consider rent payments for a borrower if it would positively impact their application. Any imperfections in rent payment history will not impact a borrower’s ability to qualify.
This is a huge development for people with young or lower credit scores. First-time homeowners, according to Fannie Mae’s National Housing Survey, are the most disadvantaged when it comes to qualifying for a loan—especially Black and Hispanic-identified consumers. Many of whom identify their credit score as what prevents them from qualifying.
Fannie Mae’s CEO Hugh R. Frater calls this new development “one important step in correcting the housing inequities of the past, creating a more inclusive mortgage credit evaluation process going forward, and encouraging the housing system to develop new ways of safely assessing and determining mortgage eligibility in order to fairly serve all potential homebuyers.”
Read the full press release here: https://www.fanniemae.com/newsroom/fannie-mae-news/fannie-mae-introduces-new-underwriting-innovation-help-more-renters-become-homeowners