How Positive Rental History Could Help You Buy a Home

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As a renter, it’s common practice for your rental payment history to be excluded from your credit report—meaning your monthly housing payment isn’t factored into your credit score. This could put you at disadvantage when you’re ready to buy a home, especially if you have a limited credit history.

The good news? Lenders who underwrite conventional loans based on Fannie Mae guidelines are now able to consider positive rental payment history when reviewing a homebuyer’s credit profile.

Evaluating your rental history

Fannie Mae’s underwriting system now allows lenders to identify recurring rent payments on a mortgage applicant’s bank statements (with their permission, of course). Only consistent rent payments made electronically or by check are considered; missing or inconsistent payments won’t impact an applicant’s chances of qualifying for a home loan.

To take advantage of this underwriting feature, at least one borrower must:

  • Make rent payments of at least $300 per month
  • Have been renting for at least one year
  • Have bank statements that show the most recent 12 months of recurring rent payments
  • Have a minimum 620 credit score
  • Be a first-time homebuyer purchasing a primary residence

Bonus! Freddie Mac also has a program that helps renters build their credit history.

Gathering positive rental payment history data can help demonstrate a homebuyer’s creditworthiness and ability to handle their housing costs, since it’s likely the largest monthly obligation they’ll manage before taking out a mortgage.

Talk to one of our loan officers to figure out if you can take advantage of this first-time homebuyer incentive.

With more than 21 years in the industry, we’re a leading fintech mortgage lender saving current and potential homeowners money and time through transparent rates, zero junk lender fees*, and technology that automates over five million tasks each month. We’ve served over 100,000 borrowers, boast a 98% customer satisfaction rating and 4.9 stars on thousands of online reviews, and provide a “mortgages without migraines” experience. (*Note: Wyndham does not charge junk fees, application fees, processing fees, or underwriting fees. There can be fees charged directly by Third Parties for services such as, but not limited to, title, settlement, appraisal, taxes, and insurance.)

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