Fannie Mae is leveraging artificial intelligence (AI) and machine learning (ML) to make rent payments count for first-time homebuyers. Many renters make recurring rent payments through their checking accounts but often don’t get credit for those payments on their credit report. Fannie Mae can find evidence of those outbound, on-time rent payments by analyzing 12-month consumer-permissioned bank statements and can use that data to help lenders responsibly boost the mortgage credit risk assessment for creditworthy first-time homebuyers.
Fannie Mae’s technology solves real business problems that until recently could not be answered. Since introducing the positive rent payment history enhancement within Desktop Underwriter (DU), the company has seen 5,300 applications that have benefited from including a history of positive rent payments as part of the borrower’s credit risk assessment. Of the applications who benefitted, 51% of the borrowers identified as minority and 40% identified specifically as Black or Latino/Hispanic.
With the help of AI/ML, Fannie Mae is rethinking how it can deliver against its mission to facilitate equitable and sustainable access to homeownership and quality affordable rental housing across America, and about how it can deliver more value to the market by reducing costs and improving efficiency.
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Applying AI/ML to Identify Positive Rental Payments supports lenders
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