Multifamily REITs are working in a number of ways to promote the financial empowerment of their residents. From complimentary reporting of rent payments to the major credit bureaus, to providing access to financial workshops and coaching, REITs are focused on being responsible community members that support the long-term financial goals of those who call their properties home. .
According to Asusu, a fintech platform for financial health solutions, the barrier to financial stability for many individuals in the United States is their credit score – or lack thereof. More than 45 million Americans are considered “credit invisible,” meaning one in every 10 adults has no credit history with any of the three credit reporting agencies: Equifax, Experian or TransUnion.
Rod Griffin, senior director of consumer education and advocacy for Experian, says that many consumers who can’t qualify for a mortgage right now are already making rent payments on time, yet those payments still appear on their credit reports. May not be reflected – even if they are Often their largest monthly expense. “Including positive rent payments on a consumer credit report can help show a strong, positive credit history needed to obtain other types of credit such as car loans and mortgages,” he says.
Griffin says the sooner consumers start establishing good financial habits and maintaining healthy credit, the better off they will be. “The habits and choices consumers make now will follow them throughout their lives and can impact their financial opportunities.”
opening financial doors
Given the importance of starting and building a credit history, REITs are taking steps to ensure that their residents are getting the full benefits of being a responsible rent payer.
elme community (NYSE: ELME), a multifamily REIT that owns and operates apartment homes in the Washington, D.C. metro area and the Sun Belt, focused on enhancing the living experience for the value-conscious renter, providing reliability, service and innovation. Is.
Tiffany Butcher, COO of Elme, says Elme is proud to collaborate with Essu to provide residents access to innovative credit reporting and rental assistance programs that promote financial inclusion for working families. “These programs have been instrumental in helping all three credit bureaus collect rent payments on time as well as improving their credit scores by providing individuals and families with interest-free loans on their homes, providing cash flow stability to communities. Does.”
Amy Hopkins, vice president of Elme Investor Relations, said residents’ response to the Esusu program has been positive. “We have a large number of people adopting the Esusu program and the program is making a meaningful impact.” Hopkins says that by using Asusu, Elme has played a role in establishing credit scores for hundreds of residents for the first time.
While Elme is not allowed to view credit score data at the resident level, it can view average asset level and portfolio level credit scores. Hopkins says, “We know the program is helping our residents because we have seen our average portfolio-level credit scores increase over time, and more than 60% of residents enrolled have seen their credit scores improve. “
Hopkins says Elme’s resident retention has been historically high in the past year, and part of that may be related to the benefits residents receive, such as access to the Esusu program. “For a resident who has no credit history, establishing a credit score for the first time opens up financial doors in terms of the ability to obtain a mortgage, car loan or any other line of credit. That, combined with improvements in personal credit scores, makes this program successful and helps us know we are making a difference,” she says.
Invitation Homes Inc, (NYSE: INVH), a single-family home leasing and management REIT with approximately 96% of its wholly owned portfolio located in the Western US, the Sun Belt and Florida, is also partnering with Esusu.
Dallas Tanner, CEO of Invitation Homes, says, “We are very proud of our collaboration with Asusu’s Positive Credit Reporting program, over 180,000 of our residents have enrolled and over half of them have already improved their credit scores by an average of 34. The marks have been improved.”
He added that the collaboration could help residents achieve thousands of dollars in lifetime savings on their borrowing costs, “further enhancing the value proposition of choosing to rent a home with us.”
Meanwhile, Linda Wiley, vice president of business services Camden Property Trust (NYSE: CPT), a multifamily REIT that owns and operates 171 properties containing 58,042 apartment homes across the U.S., says reporting rent payments to credit agencies has not always been prevalent in the multifamily sector. For its part, Camden is also working with Asusu on a loyalty rewards program, Bilt.
Wiley explains that Camden’s initial relationship with Asusu came during the pandemic, when the platform worked with philanthropic organizations to offer zero or low-cost loans to residents experiencing financial hardship. She says the added benefit was the fare reporting aspect.
In 2022, Camden partnered with Bilt to offer membership rewards similar to airline miles to its residents. For residents involved in the membership program, free rent reporting is an additional service, and “icing on the cake,” according to Wiley. Bilt, like Asusu, reports only positive rent payments.
“People have seen their credit scores go up, which is really good,” says Wiley. According to Bilt, more than 5,300 Camden residents are currently enrolled in its rent reporting program.
Jonathan Lawless, head of homeownership at Built, says that for most tenants, rent is their most significant financial commitment. For young renters, it may also be their only way to demonstrate financial responsibility. By leveraging tools like BILT to report this data to credit bureaus, residents can establish credit or improve their existing credit scores. This makes it easier and cheaper to obtain a loan, saving residents significant money over time. Additionally, having a strong credit history can give renters greater financial stability and opportunities to achieve long-term goals like buying a home, he says.
reaching financial goals
Financial empowerment also comes in the form of transferring practical skills and providing resources to tenants.
In 2023, Winebrook Homes Trust, Inc.., a public unlisted REIT with assets in 24 U.S. markets, contributed $1 million to expand its partnership with nonprofit Operation HOPE, a partnership that originally launched in 2021. The collaboration provides comprehensive financial education workshops to residents, covering such topics as the basics of budgeting, saving, debt management and investing.
Residents receive access to free one-on-one financial coaching sessions with certified financial counselors from Operation HOPE, tailored to each resident’s specific needs and goals.
Additional benefits include assistance in developing a personal financial action plan to help residents achieve financial stability and long-term prosperity, and resources and assistance for residents to access financial products and services such as banking and loans.
The partnership also focuses on ongoing support and follow-up to ensure that residents are making progress toward their financial goals and are equipped with the knowledge and skills needed for financial success.
To date, Operation HOPE has served more than 1,000 clients through its partnership with Vinebrook. In the words of one Wynnebrook resident, “As I diligently implemented the strategies I learned through Operation Hope’s programs, I began to see remarkable progress. My credit score continued to rise, exceeding my initial goal and reaching an exciting 606. Improving my finances opened doors I never imagined.”
“Our goal has always been to provide hardworking people the opportunity to build their own version of the American dream: access to clean, safe, affordable homes that can be leased or owned,” says Dana Sprong, co-founder and managing partner of Vinebrook Homes. “Act as a stepping stone to buying a home.”
