Reach more qualified borrowers who have limited or no credit histories

Freddie Mac is committed to providing financing options for many borrowers.  We offer solutions that take into consideration alternative documentation, allowing you to bring borrowers with limited or no credit histories into the mortgage market. 

In order to help you assess a borrower's creditworthiness, we want to remind you that we accept Noncredit Payment References that are obtained and verified by credit reporting agencies via a Residential Mortgage Credit Report (RMCR) for manually underwritten mortgages. A Noncredit Payment Reference is a continuing obligation, such as rent, utilities, and insurance, which requires periodic payments at least quarterly.

By using Noncredit Payment References on RMCR credit reports to help assess a borrower's credit reputation you can:

• Create opportunities for first-time homebuyers, low- and moderate-income borrowers and other potential borrowers who might otherwise be subjected to unnecessary subprime mortgage rates or even be rejected entirely for financing due to little or no credit history. 
• Realize more possibilities to grow your mortgage origination business.  The use of Noncredit Payment References on RMCRs provides a solution that will help you tap into the emerging markets for borrowers with little or no credit histories. Noncredit Payment References may be used for many of our mortgage products, including Home Possible® Mortgages with LTV ratios up to 100%. (Note: A special characteristic code (SCC) 532 is required for Home Possible Mortgages with Noncredit Payment References.)
• Achieve greater efficiency by reducing the administrative burden on your staff by leveraging third party provided Noncredit Payment References on an RMCR.  Our Single-Family Seller/ Servicer Guide (Guide), provides two options for documenting Noncredit Payment References: Freddie Mac Sellers and Servicers can obtain and directly verify the Noncredit Payment References, or Noncredit Payment References can be reported and verified on an RMCR.

Please note that all mortgages using RMCRs with Noncredit Payment References must be manually underwritten. 

More Information

• ViewGuide sections 37.4, 37.7, and 37.11. Other relevant sections include 37.10 – Credit Reports and 37.5 – Credit Scores. 
• Contact your Freddie Mac representative or call (800) FREDDIE.