April 19, 2024

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Lenders Can Now Consider Rent History for Fannie Mae Loans

1 min read

Renters with slim credit score histories may nevertheless qualify for a property bank loan less than a Fannie Mae software that lets lenders to consider reliable, on-time rental payments when building lending decisions. Neither customers nor loan companies pay out extra to use the new instrument.

WASHINGTON – The Federal Housing Finance Agency (FHFA) announced on Tuesday that Fannie Mae will take into consideration rental payment historical past in chance evaluation processes. The transform ought to enable renters with slender credit history scores – typically a constrained credit score historical past due to the fact they might not use credit rating cards or demand purchases – qualify for a residence home loan.

If potential borrowers have a solid rental payment heritage, Fannie Mae will permit its creditors to contemplate that heritage in their underwriting selection. There is no added burden – either for the borrower or for the loan provider – to use this feature.

“For several homes, rent is the solitary greatest regular cost. There is absolutely no rationale timely payment of regular housing fees should not be involved in underwriting calculations,” states Fannie Mae Performing Director Sandra L. Thompson.

“With this update, Fannie Mae is using one more phase toward being familiar with how rental payments can additional broadly be bundled in a credit score assessment, furnishing an additional chance for renters to reach the dream of sustainable homeownership,” she adds.

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