Purpose of the Bill

The bill aims to provide tenants in Minnesota with the option to have their on-time rent payments reported to credit bureaus. This could help renters build their credit scores. It also includes provisions for grants to assist landlords with costs related to this credit reporting.

Main Provisions

• Tenant Credit Reporting Option: Landlords with more than ten residential rental units must offer tenants the choice to have their on-time rent payments reported to credit bureaus.
• Voluntary Participation: Tenants are not required to participate and cannot be charged for this service. Tenants can also opt-out of the program at any time, and landlords must remove them from the reporting program within 30 days of the opt-out request.
• Funding for Landlords: The bill appropriates $500,000 annually for fiscal years 2026 and 2027 to provide grants to landlords to cover the costs of implementing the necessary infrastructure for credit reporting. These funds will help pay for services, technology, software, and administrative costs.
• Priority for Grants: Priority in awarding grants will be given to landlords whose rental units are occupied by tenants with incomes at or below 50 percent of the area's median income.

Data Collection and Reporting

The Minnesota Housing Finance Agency is tasked with collecting data on the participation and effectiveness of the rent reporting requirements. By March 1, 2027, the agency must provide a report to the relevant legislative committees.

Significant Changes to Existing Law

This bill introduces new legislation under Minnesota Statutes chapter 504B, adding a requirement for landlords to offer a credit reporting option for tenants’ rent payments, which is not currently mandated by Minnesota law.

Relevant Terms

• Tenant credit reporting
• On-time rent payments
• Credit bureaus
• Minnesota Housing Finance Agency
• Income at or below 50 percent of area median income