Freddie Mac Incentivizes Housing Developers to Offer Rent Reporting
CBA’s Annual Symposium last month was just in time for an exciting announcement: Freddie Mac will now incentivize owner/operators of multifamily properties to report rental payments to the three major credit bureaus, Equifax, Experian, and TransUnion.
Discussing this new development, Alexis Sofyanos, Senior Director of Equity in Multifamily Housing at Freddie Mac, said, “At present, the most common way for rents to be reported to the credit bureaus is when there is a missed payment that has gone to a collections agency. Freddie Mac wants to flip that script, so that renters who pay their rent on time and in full each month get credit for doing so, while also putting in safeguards for the most vulnerable.”
In 2020 alone, Freddie Mac financed more than 800,000 multi-family rental units. Through a partnership with Esusu Financial, owners of rental properties that are financed by Freddie Mac, can choose to set up to offer rent reporting and receive substantial closing costs rebates. From there, the owners set up the reporting relationship directly with Esusu, but have access to Freddie Mac’s pre-negotiated rates.
For example, one developer has already acted to take advantage of Freddie Mac’s new rent reporting incentives. Related Affordable, one of the country’s largest private developers of affordable housing, signed up with Esusu to offer rent reporting for over 50,000 units.
These updates build on the headwinds of Fannie Mae’s earlier announcement to include rental trades into its automated underwriting system. CBA applauds the work by Fannie Mae and Freddie Mac in finding ways to scale rent reporting and get closer to making it a reality for all renters. CBA will continue to track and share updates as they become available!