Freddie Mac announces new initiative to help renters achieve homeownership

Freddie Mac has announced that it will now consider on-time rate payments as part of its loan purchase decisions in an effort to increase homeowner opportunities for first-time buyers.

“This extremely important initiative will help many renters move closer to achieving the dream of homeownership,” said Michael DeVito, CEO of Freddie Mac. “Millions of American adults lack a credit score or have 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 more qualified renters, particularly in underserved communities.”

This new functionality will be available on Freddie Mac’s automated underwriting system, Loan Product Advisor (LPA). Beginning July 10, mortgage lenders and brokers will be able to submit bank account data for LPA to identify one year of on-time rent payments for inclusion in the tool’s assessment of purchase eligibility. According to a statement from the company, this data is obtained from designated third-party service providers through the same automated process used for verifying assets, income, and employment.