Mortgage financing giant Freddie Mac has expanded access to credit for American families without credit scores. Beginning in June, borrowers without credit scores may be able to easily qualify for purchase mortgages or no-cash-out refinance transactions. Still, borrowers will have to show payment references, like records showing timely housing payments.
Read more: This Could Boost Millions of Credit Scores
Freddie Mac currently allows lenders to manually underwrite mortgage loans to borrowers without credit scores. Now, Freddie Mac will allow automated assessments of such borrowers, which it says will help lenders serve more potential buyers efficiently.
“We’re committed to supporting responsible lending and improving access to credit for all borrowers, including first-time home buyers, low- and moderate-income buyers, and underserved populations,” says David Lowman, executive vice president of Freddie Mac’s Single-Family Business. “It’s important that we keep pace with the evolving needs of the U.S. market and help support sustainable homeownership.”
Source: Freddie Mac