By KIMBERLEY HAAS
A Fannie Mae program designed to help build the credit scores of renters is finding success.
Launched in September, the Multifamily Positive Rent Payment Reporting pilot program allows property owners to share timely rent payment data with the three major credit bureaus. The goal is to accelerate the adoption of rent payment reporting so renters and prospective homebuyers with no or little credit can establish or improve their credit history.
Lenders can incorporate that data when evaluating potential homebuyers.
Leaders at Fannie Mae report that more than 263,000 rental units have been onboarded as of April 30. Over 10,000 renters in properties participating in the program have established credit for the first time and 58% of residents who lived in participating properties saw an increase in their credit scores.
Executive Vice President and Head of Multifamily Michele Evans said in a statement issued at the time of the launch that around 20% of the U.S. population has little or no established credit history, a group in which Black and Latino/Hispanic people are disproportionately represented.
“By accelerating the adoption of positive rent reporting across the multifamily industry, we will help ensure renter households get the credit they deserve for paying on time each month,” Evans said.
It is estimated that 44% of Black consumers own homes compared to 73% of non-Latino white consumers. Latino households had a 51% homeownership rate in 2021.
This pilot is part of Fannie Mae’s Equitable Housing Plan and Duty to Serve plan for 2022. Fannie Mae property owners are eligible for the program, which is a positive-only initiative, meaning that renters who miss a payment are automatically unenrolled to preserve their credit standing.
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