Fannie Mae Launches Platform Allowing Renters To Build Credit Score Through Their Payments
Only 44.1%% of Black Americans own their homes compared with 74.5% of White Americans. This vast disparity is a key driver of the pervasive racial wealth gap because as we know, real estate ownership leads to financial solvency. Fannie Mae recognizes this and has made a bold step in narrowing the gap.
It was recently announced the mortgage company has partnered with Rent Dynamics to launch RentPlus, a platform that aims to help renters “build credit by working with owners and managers to report on-time rental payments to the three major credit reporting bureaus,” according to a news release.
“Renters have worked extremely hard to ensure they make their rent payments on time, and RentPlus, powered by Rent Dynamics, has helped ensure that this effort is reflected on their credit reports,” Alex Buchanan, COO of Rent Dynamics said. “Working with Fannie Mae will help execute their vision that renters are rewarded for their work.”
Rent Plus claims that on average, RentPlus users see an increase of 42 points in the first year of using the program, and an uptick 80% in on-time payments for the Property Managers.
This program has the potential to dramatically assist marginalized group in raising their credit scores and increase their eligibility for home loans.
It’s reported that young adults age 25-29 from majority-Black communities have a median credit score of 582, compared with those in majority-Hispanic communities, who have a median score of 644. Those in white communities have a score that lands in the 680 range.
This is an issue the platform plans to tackle head on.
“Rent Dynamics’ RentPlus is working with property managers to help renters establish their credit history and improve credit scores using Fannie Mae’s Multifamily Positive Rent Payment Reporting,” said Michele Evans, Executive Vice President, Head of Multifamily, Fannie Mae in a news release. “Multifamily borrowers who adopt Positive Rent Payment Reporting could help more renters who pay on time each month, including historically underserved groups, improve their credit scores or build their credit history.”
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