A history of on time rental payments will positively affect Fannie Mae mortgage applications.

On-time rental payments will now factor into Fannie Mae underwriting calculations and missed rental payments won’t keep borrowers from getting a mortgage. The Federal Housing Finance Agency announced that positive rental payment history will be taken into account in the government sponsored entity’s underwriting system. The change is effective immediately, through a change to the digital underwriting system used by the agency’s regulated entity. Borrowers and lenders do not have to take any additional steps to make use of the feature. The FHFA’s acting director, Sandra Thompson, said that the change will make it easier for renters to become homeowners. Rent, she pointed out, is often the largest expense for families, and a history of paying it on-time should count for something. “For many households, rent is the single largest monthly expense. There is absolutely no reason timely payment of monthly housing expenses shouldn’t be included in underwriting calculations,” said Thompson. “With this update, Fannie Mae is taking another step toward understanding how rental payments can more broadly be included in a credit assessment, providing an additional opportunity for renters to achieve the dream of sustainable homeownership.” Thompson has already made clear in her short tenure as head of the FHFA that expanding credit to low-income and minority communities is paramount.

Source: Housing Wire