This month, Fannie Mae kicks off a new standard that allows potential homebuyers to include their rent payment history with their mortgage application. For people with limited or no credit history the change could mean the difference between qualifying for a loan or not.

People without a lot credit history can have a hard time getting a mortgage. But if they can show they paid rent on time, lenders may look at their application differently – said Jun Zhu, assistant professor at Indiana University. 

“Housing payment history is a very powerful predictor of the mortgage performance,” Zhu said.

Fannie Mae won’t require every loan application to include rental history. But for applicants who might not initially qualify, underwriters can ask for rental documentation, and Fannie Mae said this change could help correct housing inequities of the past. 

Walda Yon with the Latino Economic Development Center said the change by Fannie Mae is significant. 

“Credit history and the credit score is the biggest challenge in our immigrant community,” Yon said.

The latest census numbers show Black and Hispanic households are far less likely than white households to own their homes.