Kamala Harris’ path to financial equality and homeownership

Although the election is still a few months away, some rhetoric about the housing market and affordability is starting to emerge.

Democratic candidate Kamala Harris has provided initial insights into parts of her strategy to support current renters in their quest to become homeowners. With her proposal, Harris wants to provide a $25,000 credit to first-time homebuyers, provided they maintain a record of on-time rent payments for two years.

The importance of timely rent payments goes further tenants with homeownership dreams. For landlords, prompt rent payments are critical to meeting their own financial obligations, such as mortgage and tax payments. Real estate agents also have a part in this process, because educating renters about the importance of on-time payments allows them to build lasting relationships and pave the way for tomorrow’s homebuyers.

Historically, supporting tenants to meet their lease deadlines has relied on fairly manual methods, such as setting clear lease terms, sending reminders or offering incentives such as early payment discounts. In recent years, more advanced approaches have emerged, such as automated payment systems and online solutions. These systems range from fully automating rent collection to simply sending payment reminders.

Another important and slightly more recent addition is platforms that report on-time payments to credit bureaus, a growing trend that could encourage more consistent rental payments.

This shift toward considering rent payments as part of a tenant’s overall financial profile represents a significant evolution in how tenants can improve their creditworthiness. Rent is typically one of the largest monthly expenses, often taking up 30 to 40% of a person’s income. Despite this, on-time rent payments are not traditionally counted in a tenant’s credit history. Homeowners, on the other hand, benefit from mortgage payments that contribute to their credit score, giving them a financial edge.

Institutions like Fannie Mae and Freddie Mac recognize this disparity and missed opportunities and have recently begun to consider rental payments when assessing borrowers’ creditworthiness. This change has opened doors to private sector solutions, such as platforms that allow tenants to securely pay rent online while automatically reporting their payment history to credit bureaus. These online solutions can help renters build stronger credit profiles and may provide opportunities not only for future homeownership, but also for loans and car purchases.

Harris’ proposal to offer credit to first-time homebuyers who consistently pay rent on time could be a good opportunity. But beyond individual policies, there are broader opportunities for policymakers and regulators to promote greater financial fairness in the housing market. The Urban Institute found that fewer than 5% of renter households have their rent payment history recorded by major credit bureaus, and that data is often based on missed payments. Changing incentives to encourage rent reporting would allow renters to build credit through positive payment behavior, not just negative numbers.

Another possible reform is to encourage lenders to accept consumer-authorized data, including rental history. Lenders are often hesitant to rely on such data due to concerns about standardization and accuracy, but clearer regulatory guidance can help reduce this uncertainty. By increasing lenders’ comfort in using rent payment histories, more households could qualify for mortgage financing, promoting broader homeownership opportunities.

With housing affordability a top priority not only in this year’s elections but also in the long term, solutions like Harris’ stimulus program and systemic reforms to the way rent payments are handled can help create a more equitable housing market . Tenants, landlords, real estate agents and policymakers all have a role to play in making homeownership more accessible to more people.

Michael Lucarelli is the CEO of RentSpree.

This column does not necessarily reflect the opinion of HousingWire’s editorial staff and its owners.

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