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Freddie Mac to include on-time rent in underwriting

On-time rental payments to be included in Freddie Mac's system starting July 10

Freddie Mac announced Wednesday that on-time rental payments will be included in its underwriting system. The government-sponsored enterprise said that it hopes to incentivize “responsible” renters to make a leap into homeownership.

According to Freddie, this option will be available starting July 10 and will allow mortgage lenders to submit a borrower’s bank account data that shows a 12-month streak of on-time rent payments to its automated underwriting system.

Michael DeVito, CEO of Freddie Mac, said in a statement that millions of potential borrowers have been blocked off from homeownership because they lack a credit score, or have a limited credit history.

“By factoring in a borrower’s responsible rent payment history into our automated underwriting system, we can help make home possible for qualified renters, particularly in underserved communities,” DeVito said.

Freddie said in its announcement that a borrower’s bank account data – with a borrower’s permission—can be plucked from apps such as Zelle, Venmo or PayPal. The government- sponsored enterprise added that additional requirements for submitting rent payment data to its underwriting system will be announced sometime in July.

Freddie Mac has been eyeing different ways of incorporating on-time rental payments to help borrowers qualify for a mortgage.


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In November 2021, Freddie Mac announced that it wanted to encourage multifamily landlords to report positive rental payments to the credit bureaus to give renters a better shot at qualifying for a mortgage.

The government-sponsored enterprise said at the time that it would provide closing cost credits on multifamily loans for rental landlords who agree to report on-time rental payments through Esusu Financial.

As a result of this initiative, 70,000 households across 816 multifamily properties are enrolled in the program and more than 15,000 credit scores have been established, Freddie said.

Freddie Mac is following in the footsteps of Fannie Mae, which announced in August 2021 that on-time rental payments would factor into its underwriting calculations.

Fannie said that for first-time homebuyers’ a history of consistent rent payments makes a “significant difference” in helping an applicant qualify for a mortgage.

Per its research conducted last year, in a sample of mortgage applicants who were denied a mortgage, 17% could have received an approval if their rental payment history had been considered.

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