How Fannie wants to help renters buy!
September 2021
I want to share an update that can have an effect on some of our clients and prospects who have previously had a hard time getting qualified for home ownership.
In the past, borrowers with good rent history but other credit challenges have had their options limited.
From a recent article sourced to the Wall Street Journal:
Fannie Mae said that starting next month it will help lenders factor in borrowers’ history of rent payments when weighing those applicants’ qualifications.
Fannie Mae doesn’t require lenders to consider rent history, if a borrower has a credit report and score 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 firms. Renters’ credit scores, which are based on information in their credit reports, as a result also don’t reflect that data.
The issue has been problematic for consumers with limited borrowing histories, who have difficulty getting approved for affordable credit.
“In some markets, it’s just as expensive to rent as it is to own,” said Hugh Frater, Fannie Mae’s chief executive. For many renters, “they have the history of making payments, which in my opinion should be equally and fairly considered in their ability to pay a mortgage.”
The changes to Fannie Mae’s underwriting system, which are scheduled to go into effect Sept. 18, will allow it to automatically identify rent payments from applicants’ bank-account information.
Twelve months of consistent rent payments could help applicants qualify for mortgages, but a history of missed or inconsistent payments wouldn’t penalize an applicant, Fannie Mae said.
Applicants would need to give permission for their bank-account information to be shared.
It’s important for us to serve as many people as possible, and it’s my hope that this shift in policy will help us do that! I’ll learn more about this and keep you up to date on how this might give us extra tools.
Please drop me an email or call if you have any questions – or someone you know is in need of expert advice. I love to help those you care about. If you have a referral please click the button down below. Your referrals are the heart and lifeblood of my business.
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Omar Khamisa
Owner
Mission San Jose Mortgage
2111 W. March Lane, Suite B100
Stockton, CA 95207
Office: 209-651-2000
Mobile: 510-648-5535
Fax: 209-434-2311
NMLS: 369325
Omar@MSJMortgage.com
