Rent payment reporting program launched by Bilt Rewards

Bilt Rewards, a fintech providing rent-related services to stakeholders, on Tuesday announced new reporting aimed at helping tenants build payment track records that could be used in mortgage underwriting.

The program expands on loyalty rewards Bilt provides to tenants and technology it provides to help manage rent payments. Expanding on those services, Bilt now also will help report rent to all three major credit bureaus.

The launch comes at a time when the government-sponsored enterprises who buy a significant number of mortgages in the United States are leaning harder on rent reporting. Fannie Mae has been using it to qualify more people for home loans, and Freddie Mac has been looking to expand this type of reporting without introducing additional costs to consumers.

“We’re leveraging part of the credit-card business and merchants’ income to be able to be able to support renters,” said Jonathan Lawless, Bilt’s director of homeownership and a former vice president for product development and affordable housing at Fannie Mae.

Jonathan Lawless

Bilt offers a branded MasterCard in conjunction with Wells Fargo that tenants can use, and derives income from that process rather than from landlords or tenants as some other vendors in the space do, Lawless said.

The company is not currently working with either Fannie or its counterpart, Freddie Mac, but Lawless considers its services in line with the GSEs’ aims.

“I know when I was at Fannie Mae, we thought a lot about how we reach people to get them ready for the homeownership journey early on,” Lawless said. “It’s a notoriously difficult group to talk to at scale, and we have a distribution channel for getting to this large group of renters.”

The partnership can provide rent reporting to renters living in around 2 million units and expected to grow, according to Lawless.

“We’re increasing the number of renters that are ready to qualify for a mortgage. The other benefit that we’re offering is renter loyalty points usable for a down payment,” he said, noting Fannie added guidance authorizing this for loans last year.

Although the use of rent reporting as an indicator of mortgage performance has a relatively limited track record, some studies like one TransUnion released last year suggest it could improve on existing credit model predictability by 10% or more.