New credit report rules require 30 months of payment history

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Just saw this story here: http://bit.ly/2d6Px2R

The gist of it is that beginning tomorrow Saturday 9/24/16 lenders will now consider a mortgage applicant's payment history over 30 months to determine their credit worthiness.

It is called "trended credit data".

Borrowers that pay in full are seen as less risky and may qualify for a lower interest rate and borrowers that just pay the minimum payment will be considered higher risks.

The old trick of avoiding large purchases right before closing on a mortgage and keeping your credit nose clean for a few months will not work.

Bad news for flipping because it will shrink the buyer pool as more people will have a harder time qualifying.

[Chris Mason]

The trended data thing, like many things in life, isn't nearly as big of a deal as it's being made out to be in some circles. And let's recall that Fannie Mae doesn't have a monopoly on the secondary market, "fine, let's just do a Freddie Mac loan" is a very common solution (for those of us that do both).

Hell, there are times where I'm doing the "let's do Freddie" solution that people don't even realize I'm doing it. Most common example: Every single conventional 80% LTV 3-4 unit property loan I do for an owner occupant - all Freddie Mac, because Fannie wants 75% LTV in that scenario.

There will be times that someone who barely uses credit, but pays it off in full any month when they do, but also has a modest FICO because of the lack of credit usage and lack of paying interest (SURPRISE! FICO indirectly rewards paying interest. Credit card companies are FICO's #1 clients), that can qualify now that could not previously qualify.

There will be times where the trended data is a deal-breaker for Fannie, and for some reason they can't go Freddie, but these will be rare.

I sincerely doubt it will ever impact a deal where our FICOs are north of 700.

Interest rate pricing differences between Freddie and Fannie are very trivial (or people would notice reeeeeallly quickly when I did my "switch it to Freddie" solution, right?). It will not amount to 0.25% to rate, more like 0.25% to discount points.

Here is Fannie Mae's fact sheet thingie.