U.S. Sen. Jon Ossoff has unveiled legislation requiring landlords to report positive rental histories to help residents build credit and eventually become homeowners.
The senator’s office said he had introduced the Access to Homeownership Act earlier this week. It would apply to landlords who receive federal funding, including through Fannie Mae or Freddie Mac, for multifamily apartment buildings.
According to Ossoff, the record of on-time rent payments would go into the risk assessment standards for Georgians applying for federally insured mortgages. The Federal Housing Financing Agency would report after five years on the impact of the bill, if lawmakers pass it and it is signed into law.
“Georgia families urgently need more affordable housing. That’s why I’m introducing this new legislation that will help families build credit as renters and better position them to become homeowners,” Ossoff said in a statement.
Ossoff leaned on state Rep. Yasmin Neal (D-Morrow) to help him craft the bill. She said the two shared common goals, including increasing affordable housing supply in the state.
“What we’ve found is a lot of renters are not being able to benefit the way they should from their positive rental payments,” she said in an interview. “Because it’s in the risk assessment, it ensures that all of us are able to benefit from increasing our credit rating and then being able to use that to get a mortgage.”
In 2015, the Consumer Financial Protection Bureau published a report finding one in 10 people in the U.S., or 26 million adults, don’t have a credit record with one of the three major credit reporting companies: Equifax, TransUnion, and Experian. About 19 million Americans have a credit record but no score. A lack of credit history or low credit score impedes people applying for lower interest rate loans and mortgages.
Major credit bureaus don’t gather rental payments data unless a landlord offers tenants a rent reporting service. Residents can sign up for a rent reporting platform themselves, but most of them charge fees.
A favorable rent history can help first-time homebuyers qualify for a home. For instance, Fannie Mae allows lenders to analyze bank records to see if recurring rental payments of at least $300 have been made over 12 consecutive months to help applicants qualify. That’s providing the lenders have an applicant’s permission to run the search. Fannie Mae had previously found that fewer than 5% of renters have their rent payment history reported to a credit bureau.
Ossoff’s latest legislative push on affordable housing comes on the back of several other measures he backed, and in an election year where affordable housing has become a burning campaign issue across the country and in Georgia.
In April, he helped secure $2 million in federal funding for the Browns Mill Village, an Atlanta Habitat for Humanity housing development in Southside Atlanta. He secured an additional $500,000 in federal funds in May for Southern Crescent Habitat’s development Hannah Springs, in the city of Lovejoy in Clayton County.
The senator held a U.S. Senate Human Rights Subcommittee Hearing in Roswell in March to hear from renters about deplorable conditions in some Georgia apartment complexes, where residents had to live with violent crime, rodents and mold.
Ossoff launched an investigation after The Atlanta Journal-Constitution series “Dangerous Dwellings” exposed neglect at several Atlanta apartment buildings, including the infamous Forest Cove complex in the city’s southeast.
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