Fannie Mae will be extending its Positive Rent Payment pilot through through December 2024.
A recent poll found that over 80% of renters would like their on-time rent payments to be factored into their credit scores. And rent is often a renter's largest monthly expense, so it plays a huge factor in their credit score and their ability to obtain a mortgage.
The survey also found:
- 87% of respondents believe that having a good credit score is important
- 82% of renters who always pay their rent on time reported that they would expect to see an immediate increase in their credit score if rent payment history was included
- 79% recognize that having a higher credit score will provide them with greater financial opportunities
- 78% agree that their credit score would be more consistent if rent payment history were included
The pilot program which credits renters for on-time rent payments promotes greater financial stability, while setting renters up for a brighter financial future, according to Fannie Mae.
The government service enterprise (GSE) partnered with three fintech vendors, Esusu Financial Inc., Jetty Credit, and Entrata (recently acquired Rent Dynamics), to report positive rental payments to credit bureaus which can help renters establish, maintain, and improve their credit scores.
"We will cover the costs of collecting and disseminating rent payment data for a 12-month period for multifamily property owner/operators of Fannie Mae financed properties who leverage one of the three approved vendors to collect the data," Fannie Mae announced in a blog post.
Building credit can help alleviate challenges that limit a renter's ability to secure quality rental housing and can help them achieve their financial goals. This extension supports our objective to accelerate the adoption of rental payment reporting across the industry while advancing greater housing equity.
The pilot's first year has seen tangible results. As of September 2023, over 100 property owners, 2,170 properties, and 435,000 units have enrolled in the pilot.
So far, nearly 58% of participants have increased their credit scores, and participating renters who already had a credit score and saw an improvement had an average increase of up to 40 points.