Fannie Mae’s Steve Holden on helping renters become homeowners

Today’s HousingWire Daily features a sponsored Fannie Mae episode, hosted by HousingWire’s managing editor of Content Solutions, Maleesa Smith.

In today’s episode, Smith is joined by Steve Holden, vice president of single-family analytics at Fannie Mae, to discuss what lenders can do to help more renters become homeowners.

Here is a short preview of the interview, which has been lightly edited for length and clarity:

Maleesa Smith: Fannie Mae recently updated its automated underwriting system. The goal is to make it easier for more potential homebuyers to use their rent payment history as part of the mortgage application process. Can you tell us more about this update?

Steve Holden: Yeah, that’s right. On the weekend of September the 18th, we updated Desktop Underwriter to enable lenders to consider rental payments when evaluating borrowers for mortgage credit. We can do this by reviewing 12 months of a borrower’s bank statements from the account they have been using to pay their rent. If we can identify 12 months of rent payments, DU will give the borrower credit for making those payments in the mortgage underwriting process. So, for first time, for homebuyers who do not receive an approved eligible recommendation from desktop underwriter, we will issue a message on whether or not 12 months of rental payment history might make a difference. To give you a sense of the numbers, in a recent sample of mortgage applicants who have not owned a home in the past three years and did not receive a favorable recommendation through desktop underwriter, 17% could have received approve eligible if their rental payment history had been considered. So, we think this change is going to allow more aspiring first-time homebuyers to responsibly qualify for a mortgage, including those with a more limited credit history.

HousingWire Daily examines the most compelling articles reported across HW Media. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsrooms that are helping Move Markets Forward. Produced by Alcynna Lloyd and Elissa Branch.

If you have a pitch or an inquiry relating to podcasts, you can reach our team at  alloyd@housingwire.com and ebranch@housingwire.com