Objective: Allow long-term, consistent rent payment history to serve as valid proof of financial responsibility when applying for a mortgage.
Rationale:
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Fairness: Many individuals pay rent that is equal to or greater than the cost of a mortgage, demonstrating their ability to manage comparable financial obligations.
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Financial Inclusivity: By considering rental history, lenders can expand homeownership opportunities to responsible tenants who may not meet traditional credit requirements but have proven reliability in managing housing expenses.
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Economic Stability: Enabling more renters to transition to homeownership can stabilize communities, improve housing security, and boost local economies.
Implementation:
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Rental payment records from the past 12-24 months must be verified through official documentation, such as bank statements or landlord statements.
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Positive rental history should directly factor into mortgage applications, comparable to how credit scores are weighed.
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Landlords and rental management companies should be encouraged or required to report rental payments to credit bureaus, ensuring rental histories are readily accessible.
Potential Impact:
Makes homeownership more accessible, particularly for those with nontraditional credit histories.
Recognizes renters’ financial discipline, rewarding timely payments with equitable mortgage considerations.
Reduces systemic barriers to homeownership for middle- and lower-income families.