Fannie said that the DU enhancement aims to create homeownership opportunities for renters with a limited credit history but a strong rent payment history.

“Many renters believe they will never be able to buy their own home because of insufficient credit,” said Fannie Mae CEO Hugh Frater. “We can responsibly expand mortgage eligibility by including positive rent payment history in underwriting risk assessments.”

According to Fannie Mae’s research, lenders considering a first-time homebuyer’s history of consistent rent payments makes a huge difference in the applicant’s chances of qualifying for a mortgage. In a recent sample of mortgage applicants who had not owned a home in the past three years and who did not receive a favorable recommendation through Desktop Underwriter, 17% could have received an “Approve/Eligible” recommendation if their rental payment history had been taken into account.

“The ability to use rent payments to qualify for a mortgage is helpful to people who don’t have a lot of credit accounts,” Holden Lewis, home and mortgage specialist at NerdWallet, explained. “When people have credit cards, auto loans, student loans, and other types of debt, they have a rich credit history that mortgage lenders can rely on. But it’s harder to assess someone’s creditworthiness when they have few accounts or none at all, and these people will benefit from being able to use on-time rent payments to qualify for a mortgage.”

Read more: Finding a starter home gets even harder – Freddie Mac