Fannie Mae issued Lender Letter LL-2019-06, amending income eligibility requirements for HomeReady loans. Per the Lender Letter, to be eligible for a HomeReady loan, a borrower’s total annual qualifying income may not exceed 80% of the area median income for the property’s location. Previously: there was no income limit for properties located in low-income census tracts (census tracts where the median income is 80% or less of the area median income); and for all other properties, the borrower’s total annual qualifying income could not exceed 100% of the area median income.
In addition, Fannie Mae updated Desktop Underwriter’s (DU) eligibility assessment to better align the mix of business delivered to Fannie Mae with the composition of business in the overall market. As a result, certain new loan casefiles submitted to DU on or after July 20, 2019 will receive an Ineligible recommendation when multiple high-risk factors are present.
The amendments to the HomeReady income eligibility requirements apply to loan casefiles submitted to DU on or after July 20, 2019. For manually underwritten loans, the amendments apply to loans with application dates on or after July 20, 2019.
