Dark Matter Helps Lenders Consider Rent Payments When Qualifying First-Time Homebuyers

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Dark Matter Technologies has added a new, automated workflow to its Empower loan origination system (LOS) that makes it easier for mortgage lenders to identify and qualify loan applicants who could benefit from evaluation of their positive rent payment history.

Developed in partnership with Informative Research utilizing the positive rent payment history enhancement in Fannie Mae’s Desktop Underwriter (DU), the workflow in the Empower LOS is configured to allow lenders to improve pull-through for borrowers who have a history of consecutive rent payments, Dark Matter says in a release.

Fannie Mae’s positive rent payment history enhancement was introduced with the goal of promoting equitable and sustainable homeownership among renters with limited credit histories. By leveraging 12-month asset verification reports furnished by authorized providers such as Informative Research’s AccountChek, and by using an integrated LOS such as Empower, lenders can harness Fannie Mae’s DU automated underwriting system can take into account positive rent payment data when assessing the creditworthiness of certain first-time homebuyers.

According to Fannie Mae, as of Q4 2023, 5,600 mortgage applications have benefitted from the borrower’s positive rent payment history by being deemed approve-eligible. Forty-one percent of the applicants who benefitted identified as Black or Latino/Hispanic.

“Using positive rent payment history in credit evaluations is one of several ways Fannie Mae is improving access to affordable homeownership that supports our commitment to our mission and strong credit underwriting standards,” says Peter Skarnulis, vice president of single-family digital management solutions for Fannie Mae. “This new workflow makes it more practical for lenders to take advantage of this feature, which can help more first-time homebuyers qualify for a home loan.”

Photo: Bruce Mars

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