Fannie Mae to Add Rent Payments to Credit Evaluations
It has been under discussion for what seems like forever, but Fannie Mae will begin to recognize non-reported types of credit performance in qualifying a loan. On September 18, it will launch a new feature in its automated underwriting system that will incorporate consumers’ rent payments in credit evaluations. The process, which will require borrower consent, will enable single-family lenders to automatically identify recurring rent payments on an applicant’s bank statements. The company says its new Desktop Underwriting (DU) enhancement creates new opportunities for homeownership for qualified renters with limited credit history but a strong rent payment history while still promoting safe and sound lending, Only consistent rent payments will be considered. Any records of missed or inconsistent rent payments identified in the bank statements will not negatively affect the applicant’s ability to qualify for a loan sold to Fannie Mae. Rent payments that appear in the payment history of the borrower’s bank account data can be identified, whether made via check or electronically, such as via a company’s payment portal or other digital payment solution.
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