Fannie Mae aims to make home loans more accessible
Mortgage finance giant Fannie Mae is making it easier to include rental payment history as part of the mortgage approval process, a move meant to help borrowers with limited credit histories have better access to finance. home loans.
Fannie Mae said that starting next month, it will help lenders take into account borrowers’ rent payment history when assessing the qualifications of these applicants.
Fannie Mae does not require lenders to consider rental history if a borrower has a credit report and rating that meet the company’s criteria. But credit reports often don’t include residential rent payments because most landlords don’t report the data to credit reporting companies. Renters’ credit scores, which are based on information in their credit reports, therefore do not reflect this data either.
The problem has been problematic for consumers with limited borrowing histories, who struggle to get approved for affordable credit.
âIn some markets, it’s just as expensive to rent as it is to own,â said Hugh Frater, Managing Director of Fannie Mae. For many tenants, “they are used to making payments, which in my opinion should be factored equally and fairly into their ability to pay a mortgage.”