Want to buy a home, but your credit score is too low to qualify for a mortgage? Soon you’ll be able to improve your chances of getting approved for a mortgage just by paying your rent!
If you've ever applied for a mortgage with a low credit score, you know how frustrating it can be to get approved for a loan. Qualifying for a mortgage to buy a home is dependent on a good credit score. If you believe you can’t buy a home due to insufficient credit, Fannie Mae is about to change that. On Sep 18, 2021, Fannie Mae’s underwriting system will consider your rent payment history to qualify you for a Fannie Mae-eligible mortgage. With your permission, the system will automatically recognize your rent payments from your bank statement. If you’ve missed rent payments, they will not negatively affect your ability to qualify for a Fannie Mae loan.
“Many renters believe they will never be able to buy their own home because of insufficient credit. We can responsibly expand mortgage eligibility by including positive rent payment history in underwriting risk assessments,” said Hugh R. Frater, Chief Executive Officer, Fannie Mae.
Research shows that 17% of mortgage applicants, from the past three years, could have been eligible for a loan if their rent payments were considered. Thanks to the upcoming changes in Fannie Mae’s Desktop UnderwriterⓇ, the assessment of your credit will benefit from consistent rent payments. To learn more, visit Fannie Mae’s website.
For more information on improving your credit score, visit our blog article: