Fannie Mae Launches Platform for Renters to Boost Their Credit Score Through Payments

Only 44.1% of black Americans own their homes compared to 74.5% of white Americans. This vast disparity is a key factor in the pervasive racial wealth gap because, as we know, real estate ownership leads to financial solvency. Fannie Mae recognizes this and has taken a bold step to close the gap.

It was recently announced that the mortgage company has partnered with Rent Dynamics to launch RentPlus, a platform that aims to help tenants “build credit by working with landlords and managers to report rental payments on time to the three major credit reporting bureaus”, according to a press release.

“Tenants have worked extremely hard to ensure they make their rent payments on time, and RentPlus, powered by Rent Dynamics, has helped ensure that effort reflects on their credit reports,” said Alex Buchanan, COO of Rent Dynamics. “Working with Fannie Mae will help realize their vision that tenants are rewarded for their hard work.”

Rent Plus claims that, on average, RentPlus users see a 42 point increase in the first year of using the program and an 80% increase in one-time payments for property managers.

This program has the potential to significantly help marginalized groups increase their credit scores and increase their eligibility for home loans.

Young adults ages 25 to 29 from majority-Black communities have been reported to have a median credit score of 582, compared to those from majority-Hispanic communities, who have a median score of 644. white have a score that is in the 680 range.

It’s a problem the platform plans to tackle head-on.

“RentPlus from Rent Dynamics works with property managers to help tenants build their credit history and improve their credit scores using Fannie Mae’s Multi-Family Positive Rent Payment Report,” said Michele Evans, Vice -Executive Chairman, Head of Multifamily, Fannie Mae in a press release. “Multi-family borrowers who embrace the positive rent payment report could help more tenants who pay on time each month, including historically underserved groups, improve their credit scores or build their credit history.”

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