Good news for first-time buyers from Freddie Mac

Good news for first-time buyers from Freddie Mac Agents working with first-time buyers – especially those who are renting – will want to encourage them to build a spotless record of on-time rental payments. Here's why: mortgage applications processed by Freddie Mac's Loan Product Advisor® (LPA) now allow on-time rent payments to be factored into loan purchase decisions. Since millions of Americans have limited or no credit history, this could help many renters move closer to owning a home. Here is what you should know: One year of on-time rent payments needed With borrower permission, lenders and brokers can submit bank account information to identify 12 months of on-time rent payments. Other forms of permitted rent payment data include electronic transactions, checks, and digital payments made via Venmo, PayPal, and Zelle. No change in the existing verification process Bank account data will be obtained from designated third-party service providers using the same automated process now used to verify employment, income, and assets through Freddie's LPA Asset and Income Modeler (AIM). More requirements to come Additional LPA requirements for submitting rent payment data will be released in a July Single-Family Seller/Servicer Guide Bulletin.1 70% of Medical Collection Debt Will Soon Be Removed From Credit Reports In a joint initiative by the three Nationwide Credit Reporting Agencies (Equifax, Experian, and TransUnion), have agreed to eradicate the reporting of paid ($0 balance) medical collection debts on consumer credit reports, effective July 1st. This measure, based on extensive research by Kaiser Family Foundation showing that two-thirds of medical debts are the result of a one-time, or short-term, medical expense arising from an acute medical need, is expected to drive fair and affordable access to mortgages for more potential homebuyers and will allow many borrowers to qualify for homeownership who may not have been able to so in the past.2 57% of REALTORS® Say Lack of Inventory Prevented Clients from Buying a Home in 2021 The lack of housing supply was cited by 57% of REALTORS® as the reason that their clients were unable to complete a home purchase transaction in 2021. Housing demand surged last year with 6.12 million existing homes sold, the most since 2006. "In the last year, REALTORS® continued to navigate a challenging housing market and cited the biggest factor holding back the housing market was tight inventory," said Jessica Lautz, NAR vice president of demographics and behavioral insights. "As buyers relocated throughout the pandemic, housing affordability and lack of supply became a hurdle that agents and brokers found ways to overcome." Copyright GUCCI SINGH 2022