The Federal Housing Finance Agency announced that Fannie Mae will now allow lenders to factor in a borrower’s rental payment history during the mortgage underwriting process, a move that could qualify more potential buyers for a home loan. The FHFA’s addition of rental payments could help borrowers with limited credit histories access home loans more easily.
Credit reports usually don’t include rent payments to residences because most landlords don’t report such data to credit reporting firms. Credit scores of renters, therefore, don’t usually reflect their timely payments.
But “for many households, rent is the single largest monthly expense,” said Sandra L. Thompson, acting director of the FHFA. “There is absolutely no reason timely payment of monthly housing expenses shouldn’t be included in underwriting calculations. With this update, Fannie Mae is taking another step toward understanding how rental payments can more broadly be included in a credit assessment, providing an additional opportunity for renters to achieve the dream of sustainable homeownership.”
Find the article here: Fannie Mae to Factor Rental Payments into Mortgage Underwriting