Loan Product Advisor integration empowers lenders to use rent payments when approving borrowers
Blue Sage Solutions, a leading provider of digital lending platforms, announced a collaboration with Freddie Mac to integrate positive rental payment history into the mortgage approval process. This initiative aims to expand homeownership opportunities for long-term renters by recognizing their consistent rent payments as a favorable factor in mortgage evaluations.
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Freddie Mac’s Loan Product Advisor(LPA) recently incorporated positive rental payment history into its credit assessment for conventional loans. The enhancement allows lenders to consider a borrower’s on-time rent payments when determining eligibility for home financing. Blue Sage Solutions now allows originators the option to indicate a borrower’s positive rental history in the Blue Sage Digital Lending Platform.
Blue Sage’s support of Freddie Mac’s offering is a significant step toward addressing the challenges many renters face when transitioning to homeownership. According to a recent Aspen Institute study, homeowners boast a median net worth of approximately $400,000, compared to just $10,000 for renters, while renters have a median household income of about $49,000 versus $92,000 for homeowners.
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By acknowledging consistent rent payments, lenders can more accurately assess a borrower’s creditworthiness, especially for those with limited traditional credit history. In fact, a recent Urban Institute report found that including rental payment history in underwriting can expand access to credit without adversely affecting the borrower’s profile.
“Our collaboration with Freddie Mac underscores our commitment to leveraging innovative solutions that promote home affordability,” said Carmine Cacciavillani, founder and chairman of Blue Sage Solutions. “By integrating rental payment history into our Digital Lending Platform, we’re empowering lenders to make more informed decisions and help more borrowers achieve their dreams of homeownership.”
“Our network partners such as Blue Sage are critical in the distribution of Freddie Mac’s offerings. Blue Sage’s support of borrower provided rental history is consistent with our commitment to support more borrowers with their homeowner journey”, said Christina Randolph, VP, Distribution at Freddie Mac.
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Blue Sage Solutions’ swift implementation of Freddie Mac’s LPA update ensures that lenders can immediately begin using a borrower’s rental payments in their underwriting processes. This proactive approach not only enhances the accuracy of credit evaluations but also opens new pathways for renters aspiring to become homeowners.
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Source: PR Newswire
