MBA’s Affordable Homeownership Advisory Council: Leveraging Rental Payment History to Approve More First-Time Homebuyers

Managed by MBA Senior Policy Specialist, Strategic Industry Engagement, Anthony Siller, MBA’s Affordable Homeownership Advisory Council discusses affordable homeownership concerns and provides recommendations to MBA’s Residential Board of Governors for policy consideration.

The Mortgage Bankers Association and its Affordable Homeownership Advisory Council just released a white paper, Leveraging Rental Payment History to Approve More First-Time Homebuyers, outlining how lenders and the government-sponsored enterprises can more effectively use rent payment data to responsibly qualify first-time homebuyers.

Building on existing GSE policies that allow for the consideration of verified rent payments, the paper identifies several key steps the industry can take to operationalize and scale the use of this data. Recommendations include prioritizing digital verification methods, integrating rent history into the early stages of the underwriting process, and targeting borrower populations who are most likely to benefit—especially renters with thin credit files or limited traditional credit histories.

“Incorporating verified rent payments into loan files from the outset—not as a second look—can change outcomes for aspiring homeowners,” said Jeremy Potter, AHAC consultant and Founder of Next Belt LLC. “The policy is sound, but to make it work in practice, lenders and vendors must build workflows that prioritize automation and borrower engagement.”

Many of the renters projected to benefit from these practices come from historically underserved communities—where thin credit files or debt-to-income ratios can unfairly obscure a borrower’s ability to repay. The Council’s work illustrates that rent payment data, when integrated properly, can indicate a lower overall credit risk than might be reflected through conventional credit scoring alone.

AHAC Co-Chair Michael Innis-Thompson mentions, “It provides a more holistic, accurate picture of an individual’s financial ability to repay the loan and demonstrates responsiveness and responsibility in managing finances, which can open doors for borrowers who historically didn’t have strong credit profiles without this information. For underserved communities, consistent rent payments offer a powerful signal of financial reliability – one that conventional credit scoring often overlooks.”

MBA is also engaging the GSEs to support enhancements to automated underwriting and data verification systems that would further streamline the use of rent data in the origination process. MBA is requesting data from the GSEs to help lenders refine marketing and identify applicants most likely to benefit from the collection of rent payment history. Furthermore, MBA believes lenders and the GSEs should partner on a specific goal to increase the rate of adoption of digital verification to 50% by 2028.

As a next step, MBA will launch an education series focused on helping lenders and industry partners adopt the report’s recommendations. The series will cover topics such as current GSE policy, lender adoption of digital verification, adjusting the lender workflow, changing loan officer behavior, identifying applicants most likely to benefit, and housing counselor and real estate partnership opportunities.

Approving more first-time homebuyers by leveraging additional data sources is a priority of MBA’s Residential Board of Governors (RESBOG). “Utilizing consumer permissioned digital checking account payment data is the way of the future for the mortgage industry,” said David Battany, RESBOG Chair and AHAC member. “This will improve how we measure a person’s ability to pay a mortgage loan, result in higher quality credit approval decisions, and increase homeownership opportunities to more people.”

Learn more about the Affordable Homeownership Advisory Council here.