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Fannie Mae and Freddie Mac Will Allow Rent and Utility Payments to Influence Credit Scores, Making Rent-to-Own Deals for Tenants More Feasible for Landlords

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The rent-to-own strategy has proven to be a trusted way for investors to sell their properties to tenants at a profit. What’s not usually so trusted in these scenarios is the assurance that your tenants will improve their credit scores enough to qualify for a mortgage and actually be able to buy your rental.

Help for the cause has arrived from an unlikely source: government-sponsored entities (GSEs) mortgage backers Fannie Mae and Freddie Mac, who are allowing rent and utility payments included in credit reports to be factored into mortgage approvals. This is particularly advantageous for landlords, as they can now easily monitor these two essentials to ensure tenants stay on track in their quest to become homeowners.

New Rules: When Rent and Utilities Start to Count

The enhanced scoring models, which begin on July 10, aim to incorporate what federal regulators describe in a Federal Housing Finance Agency (FHFA) press release as a “new era of credit score competition.” The new move is intended to make mortgage approvals easier for potential buyers to offset years of rising home prices under the former credit score system.

According to the FHFA, both Fannie and Freddie are moving forward with the VantageScore 4.0 and FICO 10T models, which are specifically designed to favor alternative data, such as rental history, once reported to major credit bureaus.

FHFA says this transition is intended to expand access to homeownership for creditworthy borrowers who were previously overlooked by older systems that relied heavily on traditional credit cards and installment loans.

How Mortgage Lenders Access the Data

The new system will allow mortgage lenders to submit a borrower’s bank account data, including 12 consecutive months of rent payments. According to Michael DeVito, CEO of Freddie Mac, it could be a game-changer for potential borrowers with limited credit history.

“By factoring in a borrower’s responsible rent payment history into our automated underwriting system, we can help make homebuying possible for qualified renters, particularly in underserved communities,” DeVito said in a statement reported by HousingWire.

Accessing a borrower’s banking info can be accomplished with the borrower’s permission through common money transfer/payment apps such as Zelle, Venmo, or PayPal.

Landlords Are a Part of the Equation

Freddie Mac announced in November 2021 that it wanted multifamily landlords to report positive rental payments to the three major credit reporting bureaus through Esusu Financial, enabling renters to become homeowners.

Freddie Mac CEO Michael DeVito said at the time:

“Rent payments are often the single largest monthly line item in a family’s budget, but paying your rent on time does not show up in a credit report like a mortgage payment. That puts the 44 million households who rent at a significant disadvantage when they seek financing for a home, a car, or even an education. While there remains more to do, this is a meaningful step in addressing this age-old problem.”

Sister GSE Fannie Mae first announced in August 2021 that one-time rental payments would be factored into its underwriting calculations. Bill Pulte, chairman of Fannie Mae and Freddie Mac, said on social media the change “expands credit access to millions of forgotten Americans—people who live in rural areas, renters who pay their rent on time every month—and [helps] bring down closing costs.”

The Role Landlords Play

Rent and utility payments aren’t automatically factored into a tenant’s mortgage eligibility. Landlords or property managers typically need to work with a rent-reporting service to transmit data to Equifax, Experian, or TransUnion. To that end, Freddie Mac’s multifamily division has launched a program that encourages this, including up to two years of on-time rental payments.

For landlords of single-family properties who hope to sell to their tenant-occupants, Freddie Mac has updated its Loan Product Advisor (LPA) so lenders can indicate when a borrower’s rent payment history has been documented.

This typically occurs in one of three ways: either through asset reports identifying recurring rent transfers; by submitting leases, bank statements, or canceled checks; or through third-party verification reports with prior tenant approval.

PennyMac, a major correspondent lender, said that for certain types of mortgages, a positive history of rent payments can upgrade a loan’s risk class from “Caution” to “Accept,” improving the borrower’s approval chances. An essential component for approval is 12 months of consecutive on-time payments with no delinquencies.

Fast-Tracking First-Time Homebuyers

In qualifying tenants, landlords might want to mention Freddie Mac’s Desktop Underwriter (DU) system to their tenants, which identifies at least 12 months of recurring bank statements totaling $300 or more and uses that information to approve first-time homebuyers. The advantage is that it does not directly affect the consumer’s credit report or score.

Equally, Fannie Mae’s Multifamily Positive Rent Payment Reporting pilot program in the multifamily sector allows landlords to share positive rent payments with credit bureaus.

To be considered for a Fannie Mae mortgage under current guidelines introduced in 2022, renters must meet the following criteria:

  • Be a first-time homebuyer purchasing a principal residence,
  • Have a credit score of at least 620 (nontraditional credit is generally not permitted),
  • Have been renting for at least 12 months,
  • Have rent payments of $300 or more per month, and
  • Have bank accounts that document the most recent 12 months of recurring rent payments.

Rent Reporting Can Help Potential Homebuyers

Rent reporting makes a difference, according to early monitoring of one Fannie Mae rent reporting program in which renters saw an average of a 40-point increase in their credit scores once one-time payments were factored in. According to a 2023 Bankrate article, over 23,000 renters established credit through the program.

According to a November CNBC article, TransUnion found that rental reporting can boost credit scores by an average of nearly 60 points. 

The article reports that rent reporting services such as Boom, Rent Reporters, and Rental Kharma will verify a tenant’s payment history and submit the information to the credit reporting bureaus. However, these companies all charge a fee for their services.

“There is a logistical problem for the bureaus to receive rental data from landlords, since there are so many landlords and many of them are too small to bother with,” says Jim Droske, president of Illinois Credit Services. “So, rent reporting companies have recently stepped in to fill the gap.”

Final Thoughts

Landlords will likely need to check with their tenants about how their potential lenders are qualifying them. A 2026 guide from Background Check Solutions notes that while FICO 8 is widely used across many types of mortgage lending, it generally does not incorporate rental data. However, FICO 9 and FICO 10 do.  

Also, expanded rent and utility reporting options won’t automatically make your tenants eligible for a mortgage if they are behind on credit card or other payments. That’s why a landlord’s first step in choosing tenants who can one day buy their property is to screen meticulously before renting.

For landlords with a large number of properties—some of which they are looking to sell—it might involve approaching long-term tenants with a good payment history to see if they are interested in buying.

The ideal candidate is not one with black marks on their credit profile that you are attempting to transform into a shining example of fiscal responsibility, but rather a tenant who simply doesn’t have enough credit history and needs more data to qualify.

The CLARITY Act: Compromise On Stablecoin Yield Revealed

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According to a report this afternoon, a compromise has been reached on the CLARITY Act and stablecoin yield.

The CLARITY Act, or crypto market infrastructure legislation, has been held up by the banking industry, which fears competition from the digital asset sector. Banks worry that if users hold stablecoins and earn interest or generate yield, it will undermine their traditional lending business, which relies on paying little or nothing for deposits and then lending the same funds at a considerably higher rate.

According to Punchbowl News, which first revealed the update, Senators Thom Tillis and Angela Aslobrooks have agreed upon language pertaining to stablecoin rewards. The bill now clarifies that digital asset firms may offer rewards tied to stablecoin holdings, but there is a prohibition on rewards offered “in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit.”

The legislation is apparently ready to move to a markup in the Senate Banking Committee and, from there, to a full Senate Vote. As the House has already approved its version of the legislation, the bill is nearing a trip to the White House for signature into law.

While a compromise had been debated for weeks, not all industry insiders were completely pleased with the hobbling language, which is clearly a win for legacy banks.

Coinbase Chief Policy Officer Faryar Shirzad declared that it is time to get CLARITY done, while adding a caveat that the debate was based on imagined risk and not real evidence, nor a real understanding of how crypto actually works.

“In the end, the banks were able to get more restrictions on rewards, but we protected what matters – the ability for Americans to earn rewards, based on real usage of crypto platforms and networks. We also ensured the US can be at the forefront of the financial system, which in this competitive geopolitical era is paramount. That’s important for innovation, consumers, and America’s national security. Now that this issue is behind us, it’s time to focus on the broader bill. While this debate has been underway, lots of progress has been made in other areas like token classification, DeFi, and tokenization. We’re excited to review the full, final text, and for the bill to move forward. It’s time to get CLARITY done.”

While a win for legacy banks, which always have the option to compete on a level playing field, there is an expectation that, over time, innovation and benefits to consumers will eventually topple the moat established by financial firms that fear change. Effectively, it will be a short-term win for the banking industry, which has always excelled at lobbying and using regulation to stifle competition.

Perhaps the most disappointing aspect of the disagreement was that policymakers sided with banks and not consumers.

An announcement regarding a markup hearing should be posted by the Senate Banking Committee soon.

 

 

 



Have a Retirement Account? Why the “Withdrawing Interest Only” Strategy May Not Work for You.

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Have a Retirement Account? Why the “Withdrawing Interest Only” Strategy May Not Work for You.


To determine how long a retirement account is likely to last, a retiree must estimate the average rate of return on their portfolio. For those who are nervous about running out of money in retirement, estimation may not be enough.

Instead, some retirees have decided to withdraw only the interest earned on their retirement accounts each year, leaving the principal untouched. That means withdrawing more in years their portfolio is doing well and scaling back when the market is down. The goal for many is to die with the same amount of principal they started with.

For the truly risk-averse, this withdrawal strategy seems sound. However, there are several reasons it may not work for you.

Image source: Getty Images.

For most, the math doesn’t add up

Let’s say you’ve done everything within your power to maximize your Social Security benefits but need an additional $25,000 annually to provide you with the life you want in retirement. If your portfolio earns an average of 6% annually (before taxes), that means you’d need a portfolio size of $535,000. However, that calculation leaves no room to increase your annual withdrawals to keep up with inflation.

If you need an extra $50,000 annually to lead your best retirement life, an account earning an average annual return of 6% before taxes would need to be worth roughly $1.1 million. Again, that doesn’t account for inflation.

Given that the median retirement savings for adults aged 65 to 74 is $200,000, most people can’t afford to draw interest only.

The guessing game sticks with you

Withdrawing interest alone doesn’t eliminate the guesswork from retirement planning. The interest rates and returns you’ll earn are unpredictable. Due to market volatility, some years will deliver strong gains while others may produce depressing losses. When interest rates are low, it becomes more difficult to generate the income you need to live well.

There’s also the matter of inflation. At an average inflation rate of 3%, your purchasing power would be cut by approximately 50% over 24 years. Your retirement account absolutely must account for inflation, particularly given the higher healthcare costs you’re likely to face as you grow older.

Opportunity cost

An interest-only strategy may require you to unnecessarily sacrifice quality of life. If limiting yourself to interest only means missing out on travel, helping family, or other experiences that enrich your life, it may not be worth the trade-off.

A financial or retirement advisor’s input could be invaluable here, helping you create a personalized withdrawal plan that addresses any concerns about outliving your money while providing enough income to live comfortably.

Trump says a ‘final proposal’ for a taxpayer-funded takeover of Spirit Airlines is under review

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Trump says a ‘final proposal’ for a taxpayer-funded takeover of Spirit Airlines is under review



President Donald Trump said Friday that his administration was still weighing a taxpayer-funded takeover of Spirit Airlines, with talks ongoing and no final decision yet on whether to move forward with a potential bailout for a carrier mired in bankruptcy proceedings for the second time in less than two years.

Trump emphasized that a deal to rescue the financially strapped airline remained under review. The president did not provide details but said an announcement could come later Friday or Saturday.

“We’re looking at it. If we could do it, we’ll do it. But only if it’s a good deal,” he said, speaking to reporters before departing the White House for Florida.

The possibility of a bailout first emerged publicly last week, when Trump floated the idea of the U.S. government offering Spirit a financial lifeline to help keep the airline from going bust and out of business. Separately, a lawyer for the airline told a U.S. Bankruptcy Court that Spirit was in advanced talks with the government over financing that could allow it to exit Chapter 11 protection.

The president suggested the government would be able to resell the airline known for its bright yellow planes and “no frills” service for a profit once oil prices driven up by the Iran war come down.

Lawmakers from both parties and some members of the Trump administration have criticized the idea of using taxpayer funds to keep the ultra-low cost airline afloat. Speculation around Spirit’s future and the likelihood of a deal emerging has mounted with every day that passes without a resolution as the airline’s operating expenses and debts mount.

A spokesperson for Spirit, which has its headquarters in Dania Beach, Florida, declined to comment on ongoing discussions Friday and said “Spirit is operating as usual.”

The Trump administration has delivered what the president described as a “final proposal” to the airline. He framed the possible federal intervention as an effort to preserve jobs but stressed that any financial arrangement worked out would have to benefit the government.

“If we can help them, we will,” Trump said. “But we have to come first.”

Supporters of a rescue — including labor unions representing Spirit’s pilots and flight attendants — say that a collapse would cost jobs, reduce competition and push fares higher.

The airline has struggled financially since the COVID-19 pandemic, weighed down by rising operating costs and growing debt. By the time it filed for Chapter 11 protection in November 2024, Spirit had lost more than $2.5 billion since the start of 2020.

The budget carrier sought bankruptcy protection again in August 2025, when it reported having $8.1 billion in debts and $8.6 billion in assets, according to court filings.

Shortly before, its parent company revealed in a quarterly report that it had “substantial doubt” about Spirit’s ability to stay in business over the next year, citing “adverse market conditions” — including weak leisure domestic travel demand and ongoing “uncertainties in its business operations.”

The company, Spirit Aviation Holdings Inc., gave a more optimistic assessment earlier this year, saying in February that it had reached a preliminary deal with creditors and expected to exit Chapter 11 in late spring or early summer. The reorganization would result in “a new Spirit” — a smaller, leaner carrier still focused on low fares but offering premium economy options and a version of first-class seating with more legroom for customers willing to pay more.

Instead, the war that started days later when the U.S. and Israel launched strikes on Iran intensified the airline’s cash flow problems. With rising jet fuel costs tied to the war generating unexpected costs across the industry, Spirit’s creditors last month expressed doubts about whether it could continue operating, raising the possibility of the airline being forced to sell off assets and shut down.

If Spirit were to cease operations, budget-conscious and leisure travelers would likely feel it the most — especially where the airline has a big footprint, such as Las Vegas and the Florida cities of Fort Lauderdale and Orlando, according to aviation analytics firm Cirium.

The carrier flew about 1.7 million domestic passengers in February, roughly half a million fewer than it did during the same month a year earlier, Cirium said. Spirit has also sharply reduced its capacity. According to Cirium data, there are about half the number of seats available this month on Spirit flights than in May 2024: 1,646,878 compared to 3,399,378.

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Spirit Airlines Preparing to Shut Down After Failing to Secure $500M Bailout

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Spirit Airlines Preparing to Shut Down After Failing to Secure $500M Bailout


Spirit Airlines Could Shut Down for Good This Week

🔄️ Update: Spirit Airlines is preparing to shut down after failing to strike a deal for a $500 million lifeline. NYT reports that some of the investors that Spirit owed money to opposed the terms of the bailout, under which the government could have ended up owning 90 percent of Spirit, because it would have left them in a worse financial position if the airline eventually failed.

It looks like the end of the road for Spirit Airlines. After months of trying to stay afloat, a new CNBC report suggests the airline could be forced to shut down and sell off its parts as early as this week.

Spirit has been struggling for a while, but lately, everything that could go wrong has. Fuel prices have spiked, and a huge chunk of their fleet was already stuck on the ground because of engine problems. They tried to fix their finances through bankruptcy, but it seems they’ve run out of cash and time.

If Spirit actually goes under, it’s bad news for travelers. Not only could flights be canceled overnight, but ticket prices on other airlines will probably go up. Spirit was famous for being “no-frills,” but their low prices possibly kept the bigger airlines in check. Without that competition, flying may get more expensive for everyone.

If you have a flight booked with them, keep a very close eye on your email. 

Pitt Launches Free Tuition for Pennsylvania Families Earning Under $75,000

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Pitt Launches Free Tuition for Pennsylvania Families Earning Under $75,000


The University of Pittsburgh is rolling out a free-tuition program for in-state students whose families earn $75,000 or less, opening a new path to a four-year degree at four of its regional campuses.

Why it matters: The Pitt Regional Campus Tuition Pledge eliminates tuition charges entirely for eligible Pennsylvania residents — a meaningful expansion of access in a state where regional campus enrollment has been slipping for years and where annual tuition at Pitt’s branch campuses runs roughly $14,000 to $15,000 for in-state students.

For example, here is the current cost of attendance at PittBradford:

Pitt Bradford Tuition

The details:

  • Eligible families: Pennsylvania residents with household Adjusted Gross Income of $75,000 or less
  • Covered campuses: Pitt-Bradford, Pitt-Greensburg, Pitt-Johnstown, and the Pitt-Titusville nursing program
  • Effective term: Fall 2026
  • Applies to: New first-year students, transfer students, and currently enrolled students
  • How to qualify: File the FAFSA each year — no separate application

How the money works: The pledge is structured as a last-dollar benefit. Pell Grants, Pennsylvania State Grants administered through PHEAA, and any institutional scholarships are applied to tuition first. Pitt then covers whatever tuition balance remains, bringing the tuition line to $0 for every eligible student.

What’s not covered: The pledge applies to tuition only. Students still pay for housing, meals, textbooks, and required fees. At Pitt’s regional campuses, those non-tuition costs typically run $12,000 to $16,000 a year for students living on campus, meaning families should still expect a real out-of-pocket bill or a need to borrow.

The bigger picture: Pitt joins a growing list of public flagships using last-dollar tuition pledges to compete for in-state students. Penn State has Penn State Promise. Temple offers Temple Promise. The University of Michigan’s Go Blue Guarantee covers families up to $125,000. Free-tuition pledges have become a standard tool for boosting yield among middle-income families who don’t qualify for full Pell Grants but feel priced out of sticker-price tuition.

How this connects: Tuition-free programs only solve part of the affordability problem. The College Investor’s coverage of Pennsylvania financial aid and student loan programs has long flagged that PHEAA State Grants (which max out around $6,000 for the 2026-27 award year) combined with a maximum Pell Grant of $7,395 still leave most students short of the total cost of attendance once room and board are factored in. 

That gap is why even “tuition-free” students often end up borrowing. Pennsylvania residents pursuing this pledge should still review state-specific aid options and forgiveness programs before signing for student loans.

What to watch: Two things. First, whether Pitt expands the pledge to its main Oakland campus, where tuition is roughly double the regional rate and where the income threshold would need to climb to be meaningful. Second, whether the regional campuses see an enrollment bump for fall 2026, a key signal of whether income-based pledges actually move the needle on access at branch campuses, which have struggled with declining demand across the Northeast.

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Freddie Mac Updates Guidelines On Self-Employed Business Structure Changes

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Self-employed borrowers often adjust their business structure for tax planning, liability protection, or long-term growth. While these changes may make sense from a business perspective, they can create unexpected challenges during mortgage qualification, especially when trying to use one year of tax returns.

A recent update from Freddie Mac directly addresses this issue and is especially important for self-employed borrowers and their advisors to understand.

What Changed?

Effective November 8, 2024, Freddie Mac issued updated guidance clarifying how a change in a borrower’s business tax structure is treated for underwriting purposes.

Under the new guideline, when a borrower changes corporate structure, such as moving from a Schedule C sole proprietorship to an S-Corporation, the percentage of ownership must remain the same for the business to be considered the same entity. If the ownership percentage changes, Freddie Mac may view the business as new, which can trigger additional documentation requirements or disqualify the borrower from using reduced income history options.

For Self-Employed Borrowers

This update is especially relevant for borrowers seeking to qualify under Freddie Mac’s rules using one year of tax returns. Freddie Mac allows only one year of tax returns when the borrower can demonstrate at least 5 years of self-employment with the same business entity. A change in tax structure does not automatically reset the clock unless ownership remains consistent.

If ownership changes:

  • The business may no longer be considered the same entity
  • The five-year self-employment history may be interrupted
  • Two years of tax returns may be required instead of one

Common Scenario We’re Seeing

A borrower:

  • Operated as a Schedule C sole proprietor for several years
  • Converted to an S-Corporation for tax efficiency
  • Maintained the same ownership percentage

Under Freddie Mac’s updated guidance, this can still be treated as the same business, preserving eligibility for a one-year tax return qualification. However, if ownership shifts, even slightly, this benefit may be lost.

If you’re self-employed, it’s critical to understand how these changes affect mortgage qualification before you apply. Speak with MortgageDepot early so we can align your business structure with the right loan strategy.

 

Earnings call transcript: Ensign Group beats Q1 2026 EPS forecast, stock dips

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Earnings call transcript: Ensign Group beats Q1 2026 EPS forecast, stock dips

Forget Big Tech: Small businesses will hire nearly 1 million grads in 2026

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Forget Big Tech: Small businesses will hire nearly 1 million grads in 2026



While fresh-faced grads are throwing their hats in the ring for a job at the world’s biggest companies, they could have a good shot at small businesses ramping up hiring. And some of the jobs that they’re recruiting the most for could stand the test of time in the AI revolution.

About 974,000 recent graduates aged 20 to 24 will be hired at small businesses (firms with one to 49 employees) during the 2026 hiring season, from April through September, according to a recent report from payroll and benefits platform Gusto. It’s a small bump from last year’s onboarding of 962,000 early-career workers, but the market has still not fully returned to the COVID years of 2020 to 2022, when employers went on a hiring blitz. Still, there’s also been improvement with net new grad job creation; it’s crept up from a low of 60,000 in 2023 to over 100,000 in 2026. 

Mom-and-pop businesses seem to be enthusiastically hiring young workers, while titans of industry pull entry-level listings from their sites. Big companies argue that AI can now do the work of junior staffers, but some smaller owners are pushing back on that notion, actively recruiting recent grads for their tech-savvy and relationship-building skills. Mark Cuban even picked up on the trend, advising fresh-faced grads to eye up small companies for opportunities.

“Large companies are playing defense. Small businesses are playing offense,” Aaron Terrazas, an economist at Gusto, tells Fortune. “When big employers pull back on entry-level hiring, small businesses see an opening…Small business owners are also taking advantage of this, being the first graduating class that grew up with AI as a native tool, not a new skill to learn, and that makes them uniquely valuable for businesses looking to modernize fast.”

While these employers are steadily pulling stronger hiring numbers, the talent they’re looking to snag has changed entirely. 

Career tracks that once guaranteed bountiful six-figure jobs post-graduation have since dried up; financial analysts, software engineers, and research associates have all suffered the biggest declines in their share of the new grad job market. Meanwhile, both AI-centric gigs and hands-on roles are juxtaposed as the strongest growing titles for budding professionals. 

Founding engineers and AI engineers both saw the strongest growth, and conversely, AI-proof roles like field managers and service technicians are right at the top with them. And it could be capturing an interesting dichotomy in Gen Z’s labor market: those leaning into tech for success, and those making their mark in the physical trades. 

The AI revolution is ramping up tech-savvy gigs—and blue-collar work

While Gen Zers leaving college are advised to embrace AI or risk being left behind in their careers, a growing number of young professionals are ditching desk jobs for the trades. And they could be tapping into a goldmine of well-paid work, from small businesses to large. 

About 78% of Americans have noticed a rising interest in trade jobs among young adults, according to a 2024 Harris Poll survey for Intuit Credit Karma. Many of these roles—from carpenters to service technicians—offer the ideal of being your own boss while paying well. 

More Gen Z talent is catching on. Enrollment in vocational-focused community colleges jumped 16% in 2024, reaching the highest level since the National Student Clearinghouse began tracking the data in 2018. And certain professions have been catching young workers’ attention: there was a 23% surge in Gen Z enrollment in construction trades from 2022 to 2023, and a 7% increase in participation in HVAC and vehicle repair programs. Despite AI threatening to upend white-collar work, there should be no shortage of opportunities for blue-collar talent; about 3.8 million new manufacturing jobs are expected to open up by 2033, according to research from Deloitte and the Manufacturing Institute.

Meanwhile, certain tech roles are also having a renaissance of their own. AI engineer is the fastest-growing job title for young workers on LinkedIn in 2026, according to the platform’s analysis from earlier this year. And between 2023 and 2025, about 75,000 of 639,000 new AI-related U.S. job postings added to the career site were AI engineer roles. Enterprise AI platform PromptQL even offered $900 hourly wages to its AI engineers building and deploying AI agents within the business. The company’s CEO said that sky-high compensation reflects their “intuition” and technical prowess in keeping up with the AI revolution.

“We’re seeing more AI Engineers and more Founding Engineers because companies have an urgent need for young people who are native to AI to innovate,” Terrazas explains. “The graduating class of 2026 is the first college cohort to complete its entire higher education in the AI era, and many small business leaders see these young people as bringing vital cutting-edge AI skills to their companies.”

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