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FHA will consider first-time homebuyer’s positive rental history in mortgage eligibility
On September 27, HUD announced that FHA will consider a first-time homebuyer’s positive rental payment history as an additional factor in determining eligibility for an FHA-insured mortgage. HUD emphasized that adding a positive rental history indicator to FHA’s Technology Open to Approved Lenders (TOTAL) Mortgage Scorecard enables the credit evaluation to be more comprehensive and equitable. “If you’re regularly paying your rent on time, that’s a good indication you will also pay your mortgage on time,” FHA Commissioner Julia Gordon said. “We hope that adding this positive factor to all of the characteristics currently considered in an FHA credit evaluation will increase access to affordable FHA-insured mortgages for first-time homebuyers.” According to FHA’s Mortgagee Letter 2022-17, “positive rental payment history refers to the on time payment by a borrower of all rental payments in the previous 12 months.” Lenders may begin indicating a borrower’s positive rental payment history in the TOTAL Mortgage Scorecard for scoring events on or after October 30, and for case numbers assigned on or after September 20, 2021.