On-time rent payments will now be taken into account in Freddie Mac’s underwriting process, the company revealed on Wednesday. The government-sponsored company claimed that its goal is to encourage “responsible” renters to buy a property.
Starting on July 10, this option will enable mortgage lenders to send information from a borrower’s bank account that demonstrates a 12-month run of on-time rent payments to Freddie’s automated underwriting system.
The lack of a credit score or a short credit history has prevented millions of potential borrowers from becoming homeowners, according to Michael DeVito, CEO of Freddie Mac.
“By factoring in a borrower’s responsible rent payment history into our automated underwriting system, we can help make home possible for qualified renters, particularly in underserved communities,” DeVito said.
