Good news for first-time buyers from Freddie Mac
First time home buyers are highly encouraged to build a spotless record of on-time rental payments.
Here’s why: mortgage applications processed by Freddie Mac’s Loan Product Advisor® (LPA) now allow on-time rent payments to be factored into loan purchase decisions. Since millions of Americans have limited or no credit history, this could help many renters move closer to owning a home.
Here is what you should know:
One year of on-time rent payments needed
With borrower permission, lenders and brokers can submit bank account information to identify 12 months of on-time rent payments. Other forms of permitted rent payment data include electronic transactions, checks, and digital payments made via Venmo, PayPal, and Zelle.
No change in the existing verification process
Bank account data will be obtained from designated third-party service providers using the same automated process now used to verify employment, income, and assets through Freddie’s LPA Asset and Income Modeler (AIM).
More requirements to come
Additional LPA requirements for submitting rent payment data will be released in a July Single-Family Seller/Servicer Guide Bulletin.1
Connect with me for more details, for a lender to get pre-approval, or for any questions regarding buying or selling a home.
You might even be interested in a lease purchase option.