There are ways for those with very little credit history to qualify for a mortgage. Contact masshousing.com for more information.
By Jerry Kronenberg – Boston Herald
State affordable-housing bank MassHousing wants to help would-be home buyers who can’t get traditional mortgages because they don’t have enough credit history.
"We’re trying to assist people who are good credit risks, but who just don’t have traditional credit,” said Tom Gleason, executive director of MassHousing, the state’s affordable-housing bank.
To address the problem, MassHousing has begun approving loans based on how well people pay rent, utility bills and other things that loan officers don’t usually look at.
The agency and its network of 140 participating banks rate these borrowers using "ANTHEM” – the new "Assisting Non-Traditional Homebuyers in Emerging Markets” system.
Under ANTHEM, people with little traditional credit history can present canceled rent checks and other items that prove a good record of debt payments.
Normally, lenders ignore such bills, focusing strictly on bank-related debts – credit cards, student loans and the like.
Banks often simply refuse to write mortgages to young people, lower-income residents, immigrants or others who don’t have such accounts.
But Gleason said MassHousing thinks that’s wrong.
"We believe borrowers who don’t have conventional credit can be good credit risks,” he said.
The executive said MassHousing hopes to use ANTHEM to underwrite as much as $250 million of nontraditional mortgages per year, up from just $10 million today.
People seeking such mortgages can apply directly with Bank of America, Citizens Bank or more than 100 other participating Massachusetts banks.
First American Corp., a California company that created ANTHEM, will collect and verify applicants’ payment receipts.
For more information, see masshousing.com, or call 888-627-7562.