Positive rental payment history will be considered in underwriting process
The mortgage industry had mixed feelings about the Federal Housing Finance Agency’s move to count positive rental history in Fannie Mae’s underwriting process.
Advocates for affordable housing cheered the move. Lenders appeared to be supportive of the change. But some in the mortgage industry fear it is an irresponsible loosening of credit restrictions.
Starting Sept. 18, Fannie Mae will count 12 months of positive rental payment history in its Desktop Underwriter program. To be eligible, borrowers must be first-time homebuyers, pay a monthly rent of at least $300, purchase the house as a primary residence, and consent to sharing 12 months of their bank statement history.
Lenders must obtain a verification of asset report from one of Fannie Mae’s approved vendors to include with the borrower’s file. The inclusion of the rental payment history can only work in a borrower’s favor.
Phil Denfeld, chief operating officer of Fairfax, Virginia-based First Heritage Mortgage, said he is in favor of taking into account on-time rental payments.
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