Tenants from Harlem to Hollywood want to become homeowners but are worried about their credit history.

It is important for them to know that rent payments can now help people qualify for a mortgage.

The problem: Rent is the biggest monthly expense for many households, yet very few landlords report timely tenant payments to credit bureaus.

This puts tenants at a serious disadvantage when it comes to establishing their credit profile and qualifying for a mortgage.

About 20% of the US population has little or no established credit history – a group in which black and Latino consumers are disproportionately represented – and many consumers identify poor credit as their biggest barrier to getting a mortgage.

The solution: In an industry first, Fannie Mae enabled lenders to consider a consumer’s timely rent payment history when applying for a mortgage.

This means aspiring homebuyers can finally get credit for paying their rent on time each month, even if those payments don’t show up on their credit report.

Since we launched this innovation last September, more than 2,000 loan applications have become eligible for purchase by Fannie Mae, which otherwise would not have been.

Of these, about 41% of borrowers identified as black or Latino/Hispanic.

We want all potential first-time home buyers to know that this new option is available.

• We encourage them to talk to their preferred lender or use our Find a Lender resource to research lenders in their area who offer this option.
• They can access the Lender Finder Tool and other free resources at Fannie Mae’s Make Rent Count web page www.fanniemae.com/MakeRentCount. The site is translatable into six languages: Spanish, Chinese (Traditional), Filipino, Korean, Vietnamese and English.
• Our free online homebuyer preparation course, HomeView, is also a great resource for those interested in home ownership. It is available at www.fanniemae.com/Education.

Talk to Fannie Mae to learn more about how enforcing rent payments can open doors for many first-time home buyers.

For more information:

Find out more information about tenants here.

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