Recommend rent reporting when the buyer has twelve clean months with one landlord and the service reports to the bureau you pull. Otherwise it is a subscription with your name on the referral.
Three questions, in the pickup line if that's where you are.
"Same address for the last twelve months?" If no, the backdating that makes the line worth anything isn't there. Skip it.
"Any month you paid late?" If yes, choose a service that reports only on-time months, or don't refer at all. A reported late rent is a new derogatory on a file that couldn't afford it.
"Which bureau did I pull?" You know this one. If the service doesn't report to it, the buyer is paying to impress a bureau you'll never see.
Sixty no's a week, and a thin file with a clean rent history should never be one of them, because Fannie already built the door.
The door is B3-5.4-03. For a borrower without a score, you document a twelve-month housing payment history from canceled checks or bank statements, no service, no fee. B3-5.4-01 drops the reserve requirement when that history is one of the references. The rent line a service would have sold them is a line you can document yourself, and it holds at underwriting because you built it.
So the referral has two versions.
Buyer has a score and a thin file, six months or more from application: send them to rent reporting at the bureau you pull, backdated, positives-only. It lands in thirty to forty-five days.
Buyer has no score: skip the service. Ask for twelve months of statements and run the nontraditional path. Faster, free, and it's the file you'll actually submit.
Either way, send them to Calvin's piece, which tells them to ask you which bureau before they pay anyone, so the call comes to you instead of a website.
The thin-file buyer usually has one wrong item on a bureau nobody looked at. Eight files, the rent months counted, and nothing recommended that the underwriter won't count: the referral takes twelve minutes.
Sources
- Fannie Mae Selling Guide B3-5.4-03 — Documentation and Assessment of a Nontraditional Credit History
- Fannie Mae Selling Guide B3-5.4-01 — Eligibility Requirements for Loans with Nontraditional Credit
- Calvin Noman — What rent reporting can and can't do for a thin file
Every statutory citation in this article was checked against the source listed before publication. Nothing here is legal advice; if your situation has legal consequences, talk to a licensed attorney in your state.