New Rule Alert: Renters Can Now Buy Homes Without a Credit Score

For years, millions of responsible renters have been locked out of homeownership, not because they couldn’t afford it, but because they didn’t play the “credit score game.” But now? That game is changing fast.

Thanks to groundbreaking updates from federal housing authorities, renters with no traditional credit score finally have a clear path to becoming homeowners in 2025.

What's Changed And Why It’s a Big Deal

In a move that could reshape access to homeownership across the U.S., the Federal Housing Finance Agency (FHFA) has approved the use of VantageScore 4.0 in mortgage underwriting. This new scoring model, unlike FICO, factors in rent payments, utility bills, and even your phone subscription - real-world expenses that renters have been managing for years.

And that’s not all.

Both Fannie Mae and Freddie Mac have updated their rules to allow borrowers with no credit score to qualify for home loans using alternative credit history. That means:

• No credit card?

• No car loan?

• Never borrowed money?

  You’re still in the game, as long as you’ve been financially responsible.

The Specific Rules You Should Know

Here’s how the new guidelines work:

1. FHFA’s New Scoring Models (Effective July 2025)

• Lenders can now choose VantageScore 4.0 or FICO 10T instead of the old FICO model.

• VantageScore 4.0 recognizes on-time rent, utility, phone, and streaming payments.

• This opens the mortgage door to millions of credit-invisible renters.

2. Fannie Mae's Non-Traditional Credit Path (Section B3-5.4-01)

If you apply for a loan backed by Fannie Mae and don’t have a credit score, lenders can now manually underwrite your application using:

• 12+ months of on-time rent payments (must be documented)

• Other nontraditional credit references like:

  • Utility bills

  • Phone/internet bills

  • Auto insurance

  • Daycare or gym payments

Bonus: If your rent is your only reference, you don’t need cash reserves.

Note: One borrower must complete a homeownership education course if none have a credit score.

3. USDA and FHA Loans Support This Too

• USDA loans allow nontraditional credit references if your score is low or nonexistent. They even accept landlord letters as proof of rent payment.

• FHA loans still prefer a FICO score but will also consider nontraditional credit history, especially for first-time homebuyers.

Why This Matters for You

Let’s say you’ve been renting for five years, always paying on time. Maybe you budget like a pro, avoid debt, and save every month, but don’t have a credit card. Under the old rules, banks ignored all of that.

Now? Your real-world financial behavior finally counts.

This change especially benefits:

• 🧑‍🎓 Young adults and first-time buyers

• 🧳 Immigrants and newcomers without U.S. credit history

• 👩‍💻 Gig workers and freelancers

• 💰 Debt-averse savers who never borrowed

How to Get Started (Even Without a Score)

Here’s your game plan if you’re ready to move from renting to owning:

1. Collect 12–24 months of rent and bill payment records

   (Bank statements, landlord letters, rent reporting platforms like Esusu or CreditMyRent)

2. Ask lenders about VantageScore 4.0 or Fannie Mae nontraditional underwriting

3. Get pre-approved using your real payment history

4. Complete a first-time buyer education course (many are free online)

5. Work with a lender experienced in nontraditional loans

Final Word: This Isn’t Just a Policy Change - It’s a Door Opening

Millions of renters have been financially responsible for years—but got left out of homeownership because they didn't fit into a three-digit number.

With the FHFA's scoring updates, Fannie Mae’s nontraditional credit options, and government-backed programs embracing alternative histories, 2025 is your moment.

You don’t need a perfect credit file.

You just need proof that you’ve been showing up financially.

And now, for the first time, the system is ready to listen.