Lender Fact Sheet
Did you know there’s a program that can help renters establish, maintain, or improve their credit scores? When they pay rent on time, these positive rental payments can be reported to the credit bureaus to help build credit. This is an important part of Fannie Mae’s plan to advance greater housing equity.
Our Positive Rent Payment program connects property owners with providers that can report the positive rent payments of their residents directly to credit bureaus.
- Participate in the pilot at no cost. One year of positive rent payment reporting services via one of the three designated vendors will be reimbursed by Fannie Mae.
- Reporting rent may increase timely rent payments. When rent is reported, renters may be motivated to pay on time, which could help reduce delinquencies, evictions, and turnover (and increase net operating income (NOI)).
- According to a TransUnion study, 73% of renters are inclined to pay rent on time when their rental payments are reported.
- Help renters establish or improve their credit scores. Informed and responsible renters are good tenants.
- Make rent count. Rent is usually the largest recurring monthly expense that many households pay – having on-time payments reported to credit bureaus can help renters get a better rate on a loan (such as a car loan or student loan) or to buy a home.
- Access lower-cost credit. Reliable, on-time payments can help renters increase your credit score. Better credit scores lower the cost of financing to purchase a car, start a small business, or borrow for education. Even deposits for utility connections can be based on credit score.
- Open the door to homeownership. Having sufficient credit allows individuals to better qualify for a mortgage.
- Establish credit profiles. Rental payment reporting enables “credit invisible consumers” (individuals without credit history) to build credit. According to a recent Transunion study, roughly 45 million U.S. adults have little to no established credit history. Rent reporting is an equitable and inclusive solution that provides renters the opportunity to build credit.
- Find housing in higher-opportunity neighborhoods. Credit scores are a factor used to screen prospective renters. Individuals with stronger credit scores usually qualify for housing in a wider array of areas.
- Potential to lower future rental security deposits. Credit scores can impact the size of your security deposit. If you have a low credit score, a landlord might request a higher security deposit amount. If you have a high score, they could lower the security deposit.
Fannie Mae is working with three fintech vendors that provide the technology capabilities to report positive rent payments to credit bureaus: Esusu, Jetty and Rent Dynamics. Depending on the platform, companies may provide additional services such as:
- Offering emergency rent loans
- Providing budgeting solutions to help renters stay current
- Reporting up to 24 months of previous on-time payments
Visit this page to learn more about our fintech partners. These partners will confirm eligible loans/properties with the Fannie Mae Multifamily product development team.
What is positive rent payment reporting?
Rent payment reporting is the submission of a renter’s monthly on-time payment to the credit bureaus (Equifax, Experian, and TransUnion) for inclusion in the calculation of a consumer credit score.
Why is Fannie Mae doing this?
Fannie Mae’s mission is to facilitate equitable and sustainable access to quality affordable rental housing, and rent payment reporting has been identified as a tool to create a more equitable housing system. Some jurisdictions including the State of California now require landlords to offer positive rent reporting to their residents. This pilot is part of Fannie Mae’s Equitable Housing Plan and Duty to Serve plan for 2022.
How do borrowers sign up?
There are three fintech partners in the pilot program: Esusu, Jetty and Rent Dynamics. Visit this page to learn more about the fintech partners and connect with them to get started. These partners will confirm eligible loans/properties with the Fannie Mae Multifamily product development team. To learn more about the servicer reimbursement process, view these instructions.
What costs can borrowers expect to incur after the pilot?
Each vendor has a different fee structure. Detailed cost analysis can be found on the webpage here. On average, the cost for a property is about $1.50/unit/month (which will be annualized). There are also some onboarding fees that vary from vendor to vendor.
What happens if a renter doesn’t make their rental payment on-time?
We are only reporting positive payments to the credit bureaus. Vendors may offer different programs to support renters with late or missed payments. Review the specific vendor’s offerings to understand how a missed rental payment is handled.
Is the expectation that there will be wide adoption of the Positive Rent Payment initiative?
Rental payment reporting has been growing throughout the Multifamily industry, especially in the past two years. We believe that our pilot will help further adoption throughout the industry.
To view more FAQs, visit this page.