How Rent Payments Can Now Help You Get a Mortgage

Utah’s housing market is evolving—fast. While rising home prices and limited inventory have dominated headlines in Salt Lake City and surrounding cities for years, a new policy change from federal housing authorities could significantly shift the conversation, especially for first-time buyers.

For real estate watchers and professionals, this update isn't just a minor lending tweak—it's a potential catalyst for market expansion, new buyer demographics, and broader access to homeownership in Utah.

Let’s explore what changed, how it works, and what it means for the broader Utah real estate ecosystem.

A Major Policy Shift: Rent Payments Now Count Toward Mortgage Credit Scoring

In July 2025, the Federal Housing Finance Agency (FHFA) authorized mortgage lenders to use VantageScore 4.0—a credit scoring model that factors in rent, utility, and telecom payment history—for loans backed by Fannie Mae and Freddie Mac.

This is a significant departure from the longstanding reliance on traditional FICO scores, which have historically excluded rent payments unless specifically reported and manually considered.

What Makes VantageScore 4.0 Different?

• Incorporates on-time rent payments (if reported to credit bureaus)

• Can generate a score with as little as one month of credit history (FICO requires six)

• Uses trended data to assess financial behavior over time, not just a moment-in-time snapshot

• Often available through free credit monitoring platforms, increasing transparency for borrowers

For millions of Americans—including thousands of renters in Utah—this opens a new pathway to mortgage qualification, especially for those with limited credit history.

Utah Market Context: Why This Matters Locally

Utah’s housing market remains one of the most dynamic in the country. The combination of high demand, limited housing stock, and significant inward migration has created a highly competitive environment, particularly along the Wasatch Front.

According to data from June 2025:

• The median home price statewide reached $557,300, up 1.3% year-over-year

• Salt Lake City homes now have a median price of approximately $585,000

• Average days on market in Salt Lake dropped to 21 days

• Active listings increased by more than 20% compared to the previous year

These figures reflect a market in transition—moderating from pandemic-era price peaks but still competitive. For buyers who’ve struggled to break into homeownership, the ability to leverage rental history as a credit asset may be the edge they need.

Who Benefits from the Change?

While this policy is especially helpful to first-time homebuyers, its ripple effects are likely to be felt more broadly across Utah’s real estate market.

Key Groups That Could See New Opportunities:

1. Renters with limited credit history:
Those who’ve avoided traditional debt or have never taken out loans but maintain a consistent rental history—especially in cities like Provo, Ogden, and Layton.

2. Rural Utah residents:
Individuals in areas like Price, Richfield, or Roosevelt who may not have easy access to credit-building resources but pay bills reliably.

3. Immigrants or younger buyers:
Those with newer financial profiles who have relied on rent, cell phone, and utility payments instead of credit cards or loans.

These demographic segments have long been underserved by conventional underwriting models, despite often demonstrating financial responsibility.

Implications for the Utah Real Estate Market

For real estate investors, developers, and agents, this policy introduces several important considerations.

Expanded Buyer Pool

This shift could increase the number of mortgage-ready buyers across the state—especially in entry-level and mid-tier price segments. Submarkets like West Jordan, Spanish Fork, and Syracuse, which offer relative affordability, may see an uptick in buyer activity.

Downward Pressure on Closing Costs

Increased competition in the credit score marketplace may drive down fees associated with credit checks. According to the Consumer Financial Protection Bureau, these fees have increased as much as 400% since 2022, adding to already substantial closing costs. Lenders who adopt VantageScore may pass savings to buyers.

Better Predictive Models

VantageScore’s use of trended data and broader payment history may produce more accurate risk assessments. This could reduce default rates and create more stable loan pools—benefiting not only borrowers but also secondary mortgage markets and institutional investors.

What Utah Buyers Should Do Now

For buyers considering a purchase in the coming year, especially those who’ve been renting in high-cost areas like Salt Lake City or Park City, now is the time to evaluate their credit profile under the new model.

Practical Next Steps:

• Check your VantageScore 4.0 through a reputable credit monitoring platform

• Ask your landlord or property manager if your rent payments are being reported to the credit bureaus (Equifax, Experian, or TransUnion)

• Speak with a local mortgage lender who works with both FICO and VantageScore-backed loans

• Explore first-time homebuyer programs offered in Utah, many of which pair well with this update

Renters whose payments are not yet reported can look into third-party services like Experian Boost or RentReporters, which can add rent history to their credit file.

A More Inclusive Future for Mortgage Lending in Utah

Housing affordability remains a critical issue in Utah. But this new rule signals a broader effort to make homeownership more accessible, fair, and reflective of how people actually manage their finances.

Industry leaders like Shannon McGahn of the National Association of Realtors® have praised the shift, calling it a step toward a more equitable underwriting process that reflects “real-world indicators of financial responsibility.”

For real estate professionals, this opens the door to serve a wider range of buyers—and to better educate clients on how everyday financial behavior can support long-term wealth-building through homeownership.

Conclusion

This update to credit scoring comes at a pivotal time for Utah. With population growth continuing, housing supply still struggling to keep pace, and buyers eager for opportunity, this credit innovation could become a meaningful tool in reshaping who gets to participate in Utah's real estate economy.

For those closely following Utah housing market trends, this is one to watch. It may not just unlock new demand—it could reshape lending conversations entirely.