When you manage multiple properties, your goal is to approve or deny applications as quickly as possible If you are tired of waiting for tenant credit reports because tenants are taking too long or aren’t cooperating, then it’s time for you to get underwritten. The underwriting process gives you instant access to a potential tenant’s credit report, without the need for AAOA to email the tenant to release his or her report and provide permission for you to access it. AAOA offers underwriting for all of our members, allowing you to streamline your application approval process.
If you become an underwritten member, you are able to get a tenant’s credit report immediately when you order your tenant background checks and other screening reports. This allows you to make informed, instant decisions about potential tenants. It really is the fastest, most convenient way to screen tenants.
Who Can Be Underwritten?
AAOA offers credit underwriting to any member, regardless of membership level. If you feel that instant tenant screening checks — without waiting on tenant cooperation and permissions — would be beneficial to your business, then we recommend the underwriting process. This underwriting process is particularly valuable for those who have 10 or more units.
However, in order to go through the underwriting process you need qualified properties that you own, manage or rent. A qualified unit must be separate living quarters from your own personal residence, with its own address. You cannot pass the underwriting process if you are residing in the unit you plan to rent.
What Categories of Underwriting Are Available?
AAOA offers four categories of underwriting. By determining which applies to you, you can gather the right documents to apply for underwriting. The categories are as follows:
- • Individual Owner: If you own a small number of units, typically 25 or fewer, and your business is an individual, fictitious business name, LLC, family trust or closely held corporation, this is the category for you.
- • Large Private Company: If you own one or more large apartment complexes, or are an office of a corporation that does so, then you can apply for underwriting as a large private company.
- • Property Management Company: If you are the officer or managing employee of a fee-based property management company, this is the category to choose.
- • Real Estate Broker: This category applies to real estate brokers or those who are managing employees of brokerages.
What Documentation Do I Need for Credit Underwriting?
If you are ready to apply for credit underwriting, you will need to gather the correct documentation. These documents are required by the credit bureaus in order to approve the underwriting process, and failure to submit all documentation will mean delays in the underwriting process. Here’s what you will need:
On-Site Physical Inspection
All underwriting categories require an on-site physical inspection of the office or other location from which you manage your properties. This inspection must be performed by a third party that has been approved by the major credit bureaus. It will be looking for location security, including the presence of a paper shredder. For residential locations, you will need to have the inspection annually. Commercial locations have the inspection one time and again if they change locations. The cost for an on-site inspection is $59.
Personal and Financial Information
All applicants for underwriting will need to present an enlarged copy taken in “photo” or “image” mode of their driver’s licenses. They will also need a voided check or bank deposit ticket for the bank account to which you will deposit rent payments. This verifies that you have a bank account in which to deposit your rent payments.
Proof of Name and Address
All applicants, except individual owners, must provide proof of their business name, mailing address and property address. This requires a list of the properties rented and at least one of the following items:
- • Business license status from a government website
- • State tax records originating from the state government
- • Federal tax records origination from the federal government
- • Fictitious Business Name (DBA) filing proof
In addition to these basic requirements, the credit bureaus have requirements specific to the different underwriting categories.
Individual owners will need to provide either a signed rental application or a signed rental lease showing the owner’s name. The rental application must be dated within the past 12 months.
Large Private Companies
Large private companies must present three signed rental applications, either from existing or perspective tenants. The applications must include:
- • Name
- • Social Security number
- • Current address
- • Date of birth
- • Signature authorizing the credit report
- • Address of the rental property
The company must also present a complete list of all rental properties with property names and addresses in addition to the three signed applications.
Property Management Company
A property management company must present either a contract between the company and a property owner who has ordered management services or a blank contract with an existing client reference including a contact name, length of relationship and phone number.
Real Estate Brokers
Finally, real estate brokers must present one of the following that show their name, mailing address and property address:
- • Three signed rental applications authorizing credit report approval
- • Proof of membership in a local, regional or national Apartment Association
- • Landlord/tenant court with proof of filing
Real estate brokers must also submit proof of name, mailing address and property address. Acceptable proofs include:
- • Business license status from a government website
- • Business license, business license copy, or documented verification with issuing authority
- • Documented corporation verification from state or federal government
- • Articles of Incorporation and proof of filing
- • State or federal tax records from the government
Those who are contracted with a real estate firm must also submit proof of their real estate broker’s license, either through status from a government website or by submitting a copy or documented verification from the issuing authority.
The Underwriting Process — What to Expect
Once you have gathered the necessary paperwork, had your inspection, and submitted everything, expect to wait one to three business days for your account to be approved. Approval grants you instant credit access, and as soon as you place your tenant screening package order, you will have full credit reports within moments.
This process is fast and fairly simple once you have the paperwork in hand, but missing information will cause significant delays. To avoid delays, make sure you have everything ready to go before submitting your application for the underwriting process.
Are you ready to have access to instant credit reports from tenant applicants? All it takes is the underwriting process. Get started today with the help of AAOA, and take the next step toward being able to offer your tenants instant approval on their applications with the power of instant credit reports.