Streamlining our Credit-Building Process with Rent-Reporting Vendors
A little over a year ago, Freddie Mac launched its credit-building initiative to encourage the reporting of on-time rent payments to the major credit bureaus using rent-reporting technology developed by Esusu Financial Inc. Since then, the program has enrolled more than 180,000 households and helped establish credit scores for more than 27,000 participants.
To build on this success, we are making two changes to streamline our process:
1. Reimbursement Process for Enrolling Existing or New Properties: To make it easier for borrowers to participate in our program, we will begin directly reimbursing credit-reporting vendors as they provide services at eligible Freddie Mac Multifamily properties. We previously provided support for credit building as part of a loan origination.
Our reimbursement structure for vendors is designed to make the first year of credit-building services at a property cost-neutral for borrowers. Going forward, a borrower will select a participating vendor and that vendor will seek reimbursement for their services directly from Freddie Mac.
Although lenders are removed from the process since the new structure is not tied to individual loan transactions, we ask that you continue working with us to promote the program. To participate, properties only need to have a current Freddie Mac-backed loan or Low-Income Housing Tax Credit equity investment with at least 12 months remaining in its term.
We’ve provided additional details about our new process in an FAQ document.
2. Welcoming Additional Credit-Building Vendors: In February, we announced a process for adding additional credit building vendors, and we expect to continue adding to our list of vendors, which currently includes BILT Technologies Inc. and Esusu.
This new approach is designed to grow our impact and continue encouraging marketwide adoption of credit reporting. We have already seen how the simple process of reporting on-time rents can improve renters’ financial circumstances by boosting their credit scores. We also believe there are upsides for multifamily borrowers, as renters learn more about how they benefit from rent reporting.
We are grateful to our lender network for your continued efforts to promote this important initiative and to the many borrowers who saw the potential of this work and became early adopters. We hope that the future onboarding of additional vendors and our process simplifications will continue to drive enrollments.
Our goal is for on-time rent reporting to be an industry standard, and we’re proud to have helped set that in motion with your support.
As always, we appreciate your continued partnership. Thank you!