positive results achieved Fannie Mae’s Rent Payment Reporting Pilot Businesses are leading the effort to extend government funding until the end of 2024.
Fannie Mae calls the program a win-win situation for tenants and multifamily operators and says it will cover the costs associated with companies working with fintech partners to collect and provide tenant payment data to the three credit bureaus.
Three partners, Entrata, Esusu and Jetty, will continue their relationship with Fannie Mae after reporting good results from an active rent payment pilot.
Positive Rent Payments is one of several initiatives Fannie Mae and Freddie Mac have taken in recent years to help minorities and other previously credit-invisible consumers. Improve their chances of qualifying for a mortgage and other loans.Fannie Mae was the first to allow Rental data to be factored into mortgage underwriting In 2021, Freddie Mae followed suit the following summer.
Wemimo Abbey and Samir said: “This initiative has given countless renters access to high-quality car, home and student loan products, improving their financial prospects. This journey has only just begun and we are eager to further expand access to financial resources. Opportunity.” Goel, co-CEO and founder of Esusu.
Fannie Mae touted its achievements when announcing the extension, reporting that 100 property owners representing 2,170 buildings and 435,000 units had signed up for the active rent payment program. About 240,000 households reported payments as of September as a result of the program, which also helped participants establish 23,000 new lines of credit. Nearly 58% of program participants saw their credit scores improve by an average of 40 points.
GSE peer Freddie Mac recently said A year-old rent payment plan also helped achieve similar improvements since launch.
Fannie Mae also said it plans to open the program to more homeowners using its partner platforms, include only good payment histories in the data, and remove delinquent residents from the program to help preserve their credit profiles.
The company said that during the pilot period, tenants living in properties using Esusu’s digital platform saw their existing credit scores improve by an average of 39 points. Use of the tool also contributed to 4,300 mortgage loan originations worth more than $1.74 billion.
Similarly, credit scores of participating households that collect data through Entrata’s RentPlus platform increased by 26 points, and more than 8% of renters also received credit scores for the first time.
A recent Fannie Mae survey of the general public found that more than 80% of renters want on-time payments as one of the criteria in determining their credit score. 82% said they would like to see their credit score improve immediately if: Rent payment history was taken into account, while 78% believed it would remain more consistent if it was included.