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Using Rental History to Unlock Homeownership
For decades, borrowers who reliably paid rent on time were often still locked out of homeownership, simply because rent didn’t count toward credit decisions. That’s finally changing.
Thanks to a recent enhancement to Freddie Mac’s Loan Product Advisor® (LPA), lenders can now include positive rental payment history as part of a borrower’s credit assessment for conventional loans. It’s a long-overdue shift that recognizes what many renters have shown for years: if you can pay rent reliably, you can likely manage a mortgage.
Historically, these “credit-invisible” or “thin file” borrowers—often younger individuals, immigrants, or those from low-to-moderate income households—have faced significant barriers to homeownership. By incorporating rent payments into credit evaluations, Freddie Mac is helping to bridge the homeownership gap for borrowers who may have the ability to buy, but not the traditional credit profile to prove it.
This update has the potential to significantly expand access to home financing. According to a recent study by Fannie Mae, about 20% of denied mortgage applicants might have qualified if their positive rent payment history had been factored into underwriting decisions. For first-generation homebuyers—now nearly one-third of the market— the impact could be even greater.
Pew Research reports that 39% of renters spend more than 30% of their income on housing, crossing the threshold of being “rent-burdened.” Despite these financial pressures, many renters still consistently pay on time. Recognizing this reliability through LPA creates a more accurate picture of borrower creditworthiness and helps bring greater equity to the process.
Meanwhile, renters continue to face steep hurdles. The National Association of Realtors reports that the median home price hit $422,800 earlier this year—up 25% in just five years. Coupled with low housing inventory, these prices are locking out many would-be buyers.
But now, with rental history factored into credit evaluations, renters can start building stronger financial profiles—even before they find the right home.
Blue Sage Solutions and Freddie Mac: Turning Innovation Into Impact
Blue Sage Solutions was among the first technology partners to enable this Freddie Mac rental history innovation through its fully integrated Digital Lending Platform. The platform automatically captures and transmits rent payment data—removing implementation barriers and expanding access without adding steps for lenders or borrowers.
“Our collaboration with Freddie Mac underscores our commitment to leveraging innovative solutions that promote home affordability,” said Carmine Cacciavillani, founder and chairman of Blue Sage Solutions. “By integrating rental payment history into our Digital Lending Platform, we’re empowering lenders to make more informed decisions and help more borrowers achieve their dreams of homeownership.”
This isn’t just about technology—it’s about transformation. With Blue Sage, lenders can take immediate advantage of this Freddie Mac enhancement, offering more equitable opportunities for home financing while improving the borrower experience.
Ready to Rethink Mortgage Qualification?
Blue Sage Solutions is proud to support a more inclusive path to homeownership. If you’re a lender looking to harness the power of rental history in your underwriting process, now is the time.
Learn more about how Blue Sage Solutions can help you expand access to home financing – Request a demo.
