On June 30, 2015 Fannie Mae released some major improvements to their guidelines.
The biggest change that helps homebuyers is the new no equity in departing home guideline that will help a ton of buyers get out of an old home with no equity requirement (even if the mortgage is higher than the value)! That old rule said; departing homes that need rental income to offset the debt, must also have 30% equity with a signed lease agreement, etc… Now that rule only calls for a signed lease agreement with cashed security deposit, and has removed the 30% equity rule. This helps people qualify with two homes if they can’t sell the departing home; due to a higher mortgage than value. The old rule was in play to avoid buyers from buying a new home and bailing on the old departing home (as who would ever bail on a home with 30% equity) – that 30% equity rule is going away! So buyers can buy much sooner.
It also explains how Fannie Mae will now disregard applicable unreimbursed business expenses (effective immediately) which helps us avoid non-traditional debts (debts outside of credit reporting – deal killer debts)..
You can source this here – Fannie Mae’s Updated Selling Guide for more details.
Below we have provided a quick and easy outline for the new Lender Guidelines as well as a link to download the F.A.Q. section of the updates.
NEW LENDING CHANGES THAT HELP US
Fannie Mae has updated the following:
- Proof of Equity Conversion of Principal Residence Requirements No Longer Apply!
- Unreimbursed Employee Business Expenses Loosen Up
- Tip Income – How we can use it
- New Closing Disclosure and Loan Estimate Forms – AKA TRID
In addition, revisions made to the following uniform instruments are described in this Announcement:
- Texas Home Equity Affidavit and Agreement (Form 3185)
- Instructions for the Arizona Deed of Trust (Form 3003)
This document addresses frequently asked questions about Fannie Mae’s policies regarding verification of borrower income (Selling Guide B3-3), including updates in Selling Guide Announcement SEL-2014-16 and Announcement SEL-2015-07. For related information, refer to the IRS Form 4506-T Tips for Underwriting and Quality Control.
For more information or questions, please contact us.