FHFA set to order Fannie, Freddie to accept two-bureau credit reports
The requirement is expected to take effect one to three months after it is announced, per Bloomberg
The Federal Housing Finance Agency's (FHFA) impending directive for Fannie Mae and Freddie Mac to accept two-bureau credit reports is a significant development in the mortgage industry. This change is expected to take effect relatively soon, with a timeframe of one to three months after the announcement. For lessors and property owners, this shift may have implications for tenants who are seeking to qualify for apartments with income-based rent structures or those who may be applying for lease-to-own arrangements.
Currently, Fannie Mae and Freddie Mac typically require a three-bureau credit report, which can be a barrier for some potential renters or buyers who may not have a robust credit profile across all three major credit reporting agencies. By accepting two-bureau credit reports, the FHFA aims to make it easier for more people to qualify for mortgages, which could, in turn, impact the rental market. Lessor's may see an increase in applicants who have previously been excluded due to credit reporting requirements, potentially leading to more qualified tenants.
As this change takes effect, it's essential for lessors and property managers to stay informed about how this shift may impact their tenant screening processes. They should watch for updates on how Fannie Mae and Freddie Mac will implement this change and how it may influence the types of applicants they receive. Additionally, they may want to consider adjusting their own credit reporting requirements or evaluating alternative credit scoring models to ensure they remain competitive in the market.
Originally reported by housingwire.com. LeaseNews adds analysis for real estate & property readers.