What Fannie Mae’s Rule Change Means for Buyers

A new change to Fannie Mae’s underwriting rules is great for buyers.

We have some great news to share with you today! Fannie Mae has come out with some new rules to help you use your rental payments as part of your decision-making process in getting a loan.

When you apply for a loan, your lender will look at your credit history, how much money you make, how much debt you have, and so on to determine if you qualify for a loan. Many first-time homebuyers don’t necessarily have a lot of credit, but they do have a rental history. Unfortunately, less than 5% of people’s rental payments show up on their actual credit reports, so they're not getting credit for their on-time payments as a tenant.

"Studies show that, when rental history is factored into the process this way, 17% more people would be approved as eligible via desktop underwriting."

Beginning September 18, 2021, Fannie Mae will start taking rental payments into account as a part of their desktop underwriting process. Desktop underwriting is when a lender factors in all of your financial information to help you qualify for a loan. 

The system they use will look at your bank account information, meaning that if they’re able to see the consistent rent payments on your bank statements, those will count towards your getting approved. Studies show that, when rental history is factored into the process this way, 17% more people would be approved as eligible via desktop underwriting. What’s even better is that if you’re not consistent with paying your rent on time, that won’t count against you. You only get the upside!

If you have any additional questions about this rule change or anything else to do with real estate, don’t hesitate to reach out to us via phone or email. We’d love to hear from you.

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