Starting September 18th, 2021, Fannie Mae’s will enable single-family lenders with permission from mortgage applicants to automatically identify recurring rent payments in the applicant’s bank statement data to deliver an inclusive credit statement. Click here to read source
This means qualified renters who don’t have a long credit history but have a good renters payments history, can qualify for homeownership. Credit history has a big role when evaluating a buyer's qualifications to make a mortgage payment. Currently, less than 5% of renters have their rent payments reported on their credit bureau report, which puts them at a disadvantage when buying a home. Fannie Mae’s new underwriting process advocates for affordable housing and equality.
Lenders will now take into account renters' 12-month positive rental payment history in its desktop underwriter program. This is removing a barrier for potential buyers and creating economic opportunities for homeownership.
First-time homebuyers who pay a monthly rent of at least $300, that are looking to purchase a house as a primary residence, and consent to sharing 12 months of their bank statements history.
Benefits for Homebuyers
This makes it easier for borrowers to qualify for a mortgage.
Rental payments are an important expense that you show lenders that you are a reliable borrower.
If your mortgage application was rejected in the past, this can possibly help you get pre-approved.
Fannie Mae has removed a big barrier for potential homebuyers. Anyone with rental history, good credit, and the proper documents needed to buy a home have an equal opportunity. Keep in mind you will still need to have reserves for a down payment and closing costs, but with the right loan program and loan officer, homeownership can be accomplished. If you think you’re ready to take the next steps to become a homeowner, contact us today and we can find the right loan program for your needs. We are licensed in Florida, Georgia, California, North Carolina, South Carolina, Tennessee, and Texas. Be sure to follow us on Instagram for daily real estate content!