Integration with Freddie Mac’s HomeCoach tool lets housing counselors access automated underwriting tools used by mortgage lenders.

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CredEvolv, a credit and debt management education platform, says it’s now able to help turn credit-challenged home seekers into qualified mortgage applicants in five months or less with the recent integration of Freddie Mac’s HomeCoach tool.

HomeCoach provides housing counselors with a holistic perspective of a borrower’s financial situation, providing the same feedback that mortgage loan officers see when assessing underwriting risk using Freddie Mac’s Loan Product Advisor solution.

Jeff Walker

“By integrating HomeCoach into our platform, our credit coaches can now use the same automated underwriting tools lenders use to assess mortgage readiness,” CredEvolv CEO Jeff Walker said in a statement. “This essentially eliminates any uncertainty that a credit-coached consumer will qualify for a low down payment loan when that consumer reapplies with his lender.”

Freddie Mac says HomeCoach can be used during an initial assessment to determine a client’s ability to purchase a home and to create a plan for addressing deficiencies identified by Loan Product Advisor.

It can then be used as a reassessment tool for clients after any improvements in their credit, income or debt. Final confirmation of a client’s readiness to apply for a mortgage can give housing counselors and their clients confidence to take the next step and apply for a mortgage, Freddie Mac says.

CredEvolv, which streamlines communications between lenders, counselors and consumers, is a member of the National Foundation for Credit Counseling, which endorsed the company’s integration of Freddie Mac’s HomeCoach.

Jenn Pizi

“The CredEvolv concept of empowering a counselor to help customers become mortgage ready by integrating tools like HomeCoach, managing client referrals with lenders, and making document management easy, has the potential to be game changing for fee-for-service models,” said NFCC COO Jenn Pizi in a statement. “This enhancement will allow counselors to better evaluate different scenarios, position customers to achieve better outcomes, and can serve as the backbone of a scalable, high-trust counseling process.”

The Consumer Financial Protection Bureau has estimated that about one in five adults is either “credit invisible,” or doesn’t have enough credit history on file to generate a credit score. The bureau’s research shows borrowers who are Black, Hispanic or living in low-income neighborhoods are more likely to have trouble getting mortgages or other loans because they have thin credit files or no credit history at all.

“Often, when a consumer is denied a mortgage due to credit, that consumer is offered no path forward for improving their credit and financial situation to achieve mortgage readiness,” CredEvolv said in announcing HomeCoach integration. “They fall out of the loan process entirely and are left to their own devices to figure out how to improve their credit.”

Consumers who receive coaching from counselors “are far more likely to achieve credit well-being and ultimately qualify for a mortgage,” the company said.

Mortgage giants Fannie Mae and Freddie Mac are also helping borrowers with thin credit files qualify for mortgages by factoring in their rent payment history, and a number of lenders and mortgage technology providers are moving to make the most of the new guidelines.

Bank of America’s new Community Affordable Loan Solution, a zero down payment, zero closing cost mortgage for first-time homebuyers, doesn’t have a minimum credit score or require private mortgage insurance.

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Email Matt Carter

homebuying | lenders
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