Paying rent on time is a good way to make sure you don’t get evicted. Now, thanks to a new Fannie Mae policy change, that positive payment history could significantly boost your prospective clients’ chances of being approved for a home mortgage loan. 

As of Sept. 18, Fannie Mae is adding a new feature in its automated underwriting system that considers mortgage loan applicants’ rent payment history – with their permission – during the credit review process. That means that paying rent on time will officially count for something as your buyers look to transition from renter to homeowner.

According to Fannie Mae, only consistent rent payments will be considered for improving loan eligibility. Even better, any records of missed or late rent payments will not negatively affect applicants’ ability to qualify for a loan.

Rental history has always been an “unofficial” but important indicator of loan applicants’ likelihood of making mortgage payments. However, landlords aren’t required to share rental payment history to credit bureaus of mortgage lenders. As a result, lenders who use automated underwriting systems to review loan applications had no way to include rents unless they did it manually. 

The new Fannie Mae automated underwriting system will lift that burden from lenders while also removing some significant challenges for your clients. This is especially true for your prospects who have been typically overlooked or denied funding because of their subpar credit scores.  

The change also helps a sometimes-overlooked demographic – those who do not need or want to borrow money. Believe it or not, not everyone has a credit card or consumer loan.

While not being in debt certainly has its advantages, it also makes it difficult to establish a credit history. That can become problematic when home mortgage lenders look for proof that an applicant can reliably make payments on time.

Now that Fannie Mae is allowing the use of an on-time rental history to supplement traditional credit report data, millions more potential homeowners can prove their creditworthiness.

Including positive rental payment history will also benefit first-time homebuyers. According to Fannie Mae research, history of consistent rent payments is one significant difference between applicants qualifying and not qualifying for a mortgage loan.

In a recent look at mortgage applicants who had not owned a home in the last three years and didn’t receive a favorable recommendation from Fannie Mae, 17 percent may have been approved if their rental payment history had been considered.

As a real estate agent, this should be music to your ears. With low interest rates and recent FHA changes to student loan debt calculations, homeownership has never been more attractive or attainable for your clients.

So, what advice should you give your clients who currently rent but expect to hit the home buying market soon? Here are some tips:

  • Save as much as possible: Buying a home isn’t cheap. While most of the money will be borrowed, your clients still need some cash to get the process started. Encourage them to start saving for a down payment, inspection costs, closing costs, new furnishings, moving expenses, and more. 
  • Keep paying rent on time: Keep the winning streak going! If they’ve been paying rent on time for a long time, tell them to keep it up. If they’ve missed a few payments or been late in the past, they can start a new streak now. The more consistently they can pay on time, the better record they can establish.
  • Streamline bank accounts: If they’ve typically moved money around among several bank accounts, suggest that they stop. A better strategy is to combine cash into just one or two accounts and cut down on transfers. Lenders will go through bank records with a fine-toothed comb, and if they see a crazy amount of activity, it could raise a red flag.

For more information about how our team can help your client through the mortgage loan process, contact a member of our team.


Lerner, M. (2021, September 9). Fannie Mae to include rent payments in Mortgage applicants’ credit HISTORY REVIEW. The Washington Post. Retrieved September 13, 2021, from  

Fannie Mae introduces NEW Underwriting innovation to help more Renters become homeowners. Fannie Mae Introduces New Underwriting Innovation to Help More Renters Become Homeowners | Fannie Mae. (n.d.). Retrieved September 13, 2021, from