New Rule Increasing Renters Chances of Getting a Loan

August 17, 2022

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New Rule Increasing Renters Chances of Getting a Loan
According to a recent article from Florida Realtors®, renters who paid their rent on time for one year can submit that information in order to have a better chance at getting pre-approved for a mortgage loan at better interest rates. The consideration of on-time rent payments begins July 10th, 2022. Payment history is added by the lender to the Freddie Mac Loan Product Advisor (LPA), and the 12 months of on-time payments is verified by a third-party service provider.
The CEO of Freddie Mac said, “This extremely important initiative will help many renters move closer to achieving the dream of homeownership… Millions of American adults lack a credit score or have limited credit history. By factoring in a borrower’s responsible rent payment history … we can help make home possible for more qualified renters, particularly in underserved communities.”
Rent payments eligible for this include checks, electronic transactions, and digital payments (for example, Venmo or Paypal).
The President of Freddie Mac says, “One of the first steps to purchasing a home is a positive credit history, and Freddie Mac is committed to helping consumers achieve that goal… Factoring on-time rent payments into our automated underwriting system will help create even more opportunity for families across the nation.”
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