A new credit coming to homebuyers who pay rent on time.
Fannie Mae has announced a revolutionary new method in screening possible homeowners set to be put in place by the end of the month. Available to renters making recurring rent payments (minimum of $300/month) from their bank accounts which can be documented in the most recent 12 months. A lender will be able to request a verification of asset report to benefit renters who are trying to purchase their first property and promote a lender’s decision to approve their loans.
It is uncommon for landlord to report monthly on-time rent payments to credit bureaus. Therefore, the traditional credit report does not reflect the monthly rent payment histories. This verification of asset report will not impact a renters credit score, but it will increase opportunities for first time home buyers who may have a limited credit history.
According to predictions, up to 17% of Americans who have not owned a home in the past 3 years will be newly eligible for purchasing a home now. An additional 20% of the population which have no credit history will now be eligible for one of the biggest credit-building opportunities available to the public: getting their first mortgage.
There are no additional costs or reporting requirements on the renters end. If the rent payments are via check or electronic (via property management company payment portal or other digital payment methods like Venmo, PayPal, Zelle), the payments must appear in the consistent payment history in the renters bank account.
This is a massive step in the right direction, and soon, all current renters will have the opportunity to become homeowners in the near future.
Contact me to see if you qualify!