Fannie Mae to Consider Rental Payment History in Underwriting Process

The Federal Housing Finance Agency (FHFA) announced on August 11 that Fannie Mae, one of the government sponsored entities (GSEs) FHFA oversees, will consider rental payment history in its risk- assessment processes for prospective homebuyers. This change to Fannie Mae’s system will allow future borrowers to benefit from having their positive rental payment history being considered in loan underwriting decisions. No additional burdens on the borrower or the lender will be required to make use of this feature.

Starting September 18, Fannie Mae will allow lenders (with the borrower’s permission) to use bank account data to identify 12 months of consistent rent payments. This action cannot hurt renters’ credit scores and will only be used to help eligible homebuyers qualify for mortgage credit. Any records of missed rent payment identified in the data and not already reflected on the applicant’s credit report will not negatively impact their ability to qualify. This change marks the first time any large-scale automated mortgage underwriting system will leverage electronic bank statement data to consider positive rent payment history.

In a blog post discussing the update, Fannie Mae CEO Hugh Frater said this change is an important step toward creating a more equitable housing market by using technology and data to remove systemic barriers to obtaining a mortgage. For many low-income renters – particularly Black families and other people of color – one of the primary obstacles to qualifying for a mortgage is insufficient credit history. People of color are disproportionately represented among the 20% of the U.S. population that have little or no credit history. Fannie Mae’s National Housing Survey found that Black consumers (29%) are more likely to say insufficient credit scores or credit history is their primary obstacle to getting a mortgage compared to white consumers (18%). Frater says this change to Fannie Mae’s system will help correct these housing inequities.

“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 FHFA Acting Director Sandra 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.”​

Read the FHFA announcement at:

Read the Fannie Mae blog post at: