Minnesota Lawmakers Fight To Turn Monthly Rent Into Vital Path to Homeownership

Owning a home is the most valuable way to grow wealth, but in Minnesota, the journey has become disproportionately difficult for low-income residents and people of color.

But new legislation aims to change that. 

HF2123, a bill sponsored by Rep. Samakab Hussein (DFL-St. Paul), was moved to be amended in March, and if so, would mandate that landlords owning 10 or more units provide tenants the choice to have their on-time rent payments reported to credit bureaus.

A key factor in securing a mortgage is a solid credit score, which is typically one of the first pieces of information a lender examines when considering a person's eligibility.

Should the bill pass, advocates insist that it will open the door for more Minnesotans to make the transition to homeownership and start building equity for the next generation.

Renters and their credit history

The ability for renters to use their payment history to help qualify for a mortgage, even without a traditional credit history, is not a new concept. In 2025, Fannie Mae and Freddie Mac updated their policies to permit the use of VantageScore credit ratings alongside FICO scores.

Unlike some versions of FICO, VantageScore takes rent payment history into account, if those payments are reported to either Equifax, Experian, or TransUnion, the three major credit bureaus.

However, this benefit is conditional upon landlords reporting the tenants' payment history.

Historically, rent payments were left out of standard credit reporting. This exclusion has often resulted in many renters being "underscored" or even completely "unscored," which prevents them from accessing opportunities that good credit provides, such as homeownership.

“Credit is not a luxury; it is a gateway to housing, transportation, and even employment,” Kaelah Mundley, community lending coordinator at Exodus Lending, shared with the Minnesota legislature.

This is why Minnesota lawmakers are stepping in. 

Mundley, along with other advocates, argue the policy could help address Minnesota’s persistent racial homeownership gap, which they say is one of the largest in the country.

New York, Colorado, and California have all implemented similar mandates and requirements over the last five years. 

New York State Assembly Bill A2729, introduced in January 2025, largely mirrors the Minnesota proposal, as it mandates that landlords must offer tenants the option to have their rental history reported to a national credit bureau. 

In both New York and California, the law permits landlords to charge a small, capped administrative fee,  but failure to pay this fee is not grounds for eviction.

The credit score you need

While the minimum credit score needed varies depending on location, most landlords like to see 600-650 to lease out a unit. 

If you already have that, then you’re in a good position to buy a home as well, as the average credit score requirement, depending on loan amount and lender, is 620.

FHA loans often accept scores as low as 580 (with 3.5% down) or even 500 (with 10% down), while VA/USDA loans usually require 620–640.

Multiple factors affect your credit score, including outstanding balances on your credit card, applications for new credit, and the length of the credit history. 

Without a credit history, it’s hard for lenders to determine your risk level. That’s why having good rental payment history aiding your credit score can help immensely. 

An upgrade to infrastructure 

While landlords can currently report rent voluntarily, making the "opt-in" mandatory raised some concerns regarding compliance burdens, the lack of a safe harbor for good-faith errors, and implementation costs.

Cecil Smith, president and CEO of the Minnesota Multi Housing Association, pointed out to legislators that credit reporting requires “IT upgrades, staff training on federal regulations such as the Fair Credit Reporting Act, and potentially background checks for employees handling sensitive data.”

Nevertheless, the amendment was laid out this week by the House Housing Finance and Policy Committee for possible inclusion in a larger bill, to be voted on at a later date.