Rental Payment History Now Counted Towards Mortgage Eligibility
Homeownership is a wonderful way to build generational wealth for families.
Unfortunately, good credit is always one of the biggest hurdles to achieving that goal. We get so many questions from hopeful homeowners on these topics. Questions like,
“What can I do if I have a low credit score?”
“What are my options if I don’t have time to change my credit score?”
That’s why we’re excited to share that Fannie Mae has created big opportunities for renters to build generational wealth with more accessible programs for first-time homebuyers.
It’s official. Rental payment history will now be considered when determining mortgage eligibility!
All of this will be done through a desktop underwriting system to add rental payments to the mortgage evaluation process. This update will automatically find recurring rent payments in bank statement data to provide a more inclusive credit statement for applicants.
How can this help you realize the dream of homeownership?
What This Means for Potential Homeowners
Fannie Mae's new application inclusion will open doors for those looking for a home, especially for those millennials, recent college graduates, and even those with lower incomes.
Millennials and recent college grads have made up for the most significant share of prospective homebuyers over the past several years, and this inclusion addresses the hurdle they tend to face: eligibility.
And those with lower incomes have fewer opportunities to get credit. Even if their incomes rise, their lack of credit history could work against them when applying for a mortgage.
In a nutshell: the positive rent payment history allows consistent rent payments to count towards credit scores and loan applications. This added change from Fannie Mae makes it easier for applicants with limited credit and consistent rental payments to get a loan approved.
Also, adding on-time rent payments to a person's credit score could reflect positively and give someone a credit score that may not have had a credit score in the past.
What Qualifies You?
With this news in mind, here are some criteria that would help you in your homeownership goals if using rental payment history:
You must be a "first-time" homebuyer purchasing a primary residence.
You have not bought another home within the past three years.
We're Here For You
While this news is major, buying a home can still be a challenge – even with more eligibility like rental payment history.
But don’t worry! There are still some programs to assist buyers in getting a home with low or no credit.
And more updates to current programs are happening every day.
For example, starting July 1st, medical collection debt will be stripped from many people’s credit reports, providing some relief to a lot of people whose credit scores may have taken a hit and would like to start their home ownership goals.
If you have questions about how this update can help you, just reach out to us! We love to share our knowledge and help hopeful homeowners achieve their goals.
Contact Us
Our overall mission is to help you fund your home and close your loan quickly & efficiently. Our team can help you buy your first home and work with you to understand the entire mortgage process too.
Whether you want to talk about the update from Fannie Mae, the news about medical collection debt, or to start your homeownership goals, we can help you.
We want to connect with you when you have a free minute. Contact us for credit advice and apply with us to get a consultation.