Fannie Mae extends rent reporting pilot through end of 2024

Positive outcomes emerging from Fannie Mae's rent-payment reporting pilot is leading the government-sponsored enterprise to extend it through the end of 2024. 

Describing the program as a win-win situation for both renters and multifamily operators, Fannie Mae said it will cover the costs associated with collecting and delivering tenant-payment data to three credit bureaus for companies that work with its fintech-partner vendors. 

Those three partners, Entrata, Esusu and Jetty, will all continue their relationship with Fannie Mae after reporting favorable outcomes in the Positive Rent Payment pilot. 

Positive Rent Payment is one of several initiatives undertaken by both Fannie Mae and Freddie Mac in recent years to assist minorities and other previously credit-invisible consumers, helping them improve their chances of qualifying for mortgages and other loans. Fannie Mae first allowed rent data to be included in mortgage underwriting in 2021, while Freddie Mae followed suit the following summer.  

"This initiative has granted countless renters access to high-quality auto, home and student loan products, elevating their financial prospects.The journey has only just begun, and we eagerly anticipate further expansion in access to financial resources," said Wemimo Abbey and Samir Goel, Esusu's co-CEOs and founders. 

Touting its accomplishments while announcing the extension, Fannie Mae reported 100 property owners, representing 2,170 buildings and 435,000 units, had enrolled in Positive Rent Payment. Approximately 240,000 households were reporting payments through September thanks to the program, which also helped participants establish 23,000 new credit scores. Nearly 58% of program participants saw their credit scores increase by an average of 40 points. 

GSE counterpart Freddie Mac recently said its year-old rent-payment program had also helped deliver similar improvement since its rollout.

Fannie Mae also said it planned to open up the program to more property owners using its partners' platforms. Only positive payment history is included in the data, with delinquent residents removed from the program to help preserve their credit standing.

Renters with existing credit scores living in properties that use Esusu's digital platform saw an average increase of 39 points during the pilot, the company said. The tool's utilization also contributed towards 4,300 mortgage originations worth over $1.74 billion.

Similarly, participating households whose data was collected through Entrata's RentPlus platform saw a 26-point rise in their credit scores. More than 8% of its renters also generated a credit score for the first time.

A recent survey of the general population conducted by Fannie Mae found over 80% of renters wanted their on-time payments to be among criteria used to determine credit scores. Eighty-two percent said they expected to see an immediate improvement in their credit score if rent-payment history was factored in, while 78% felt it would remain more consistent when included.