Freddie Mac issued Bulletin 2020-45 (Bulletin) announcing revisions to the Single-Family Seller/Servicer Guide. Per the Bulletin, Freddie Mac updated requirements related to Home Possible Mortgages. Specifically, Freddie Mac:
- Revised the maximum loan-to-value (LTV) ratio permitted for certain Home Possible Mortgages secured by 2- to 4- unit properties;
- Reformatted language related to LTV/total LTV (TLTV) ratios for Home Possible Mortgages that use sweat equity as an eligible source of funds; and
- No longer requires the use of the Monthly Budget and Residual Analysis Form (Exhibit 23) when borrower personal funds include cash on hand; however, the mortgage file must contain documentation confirming that the total monthly residual income available for savings is a positive number.
Freddie Mac also:
- Restated the increased 2021 loan limits previously announced in Freddie Mac’s November 24, 2020 Single-Family News Center Article;
- Simplified property valuation reverification requirements for in-house quality control reviews;
- Clarified requirements for properties with solar panels when the solar panels are leased, financed or owned;
- Updated power of attorney requirements (including updates that align with previously announced COVID-19 related flexibilities);
- Increased the number of allowable extensions for Mandatory and Best Efforts Cash Contracts;
- Updated several Automated Clearing House (ACH) authorization forms;
- Revised the access management provisions of the Guide to clarify that seller/servicers are required to reset certain Authentication Credentials every 90 days (for individual user credentials) and every 365 days (for system-to-system credentials); and
- Streamlined when a property must be identified on the appraisal report with a Q6 quality rating or the C5 or C6 condition ratings.
Increased loan limits are effective for mortgages with settlement dates on or after January 1, 2021. Revisions relating to powers of attorney are effective for mortgages with application dates on or after January 4, 2021 (sellers are, however, encouraged to apply the revisions to existing loans in process). Revisions relating to in-house quality control reviews are effective on or after March 1, 2021 (sellers are, however, encouraged to implement the changes as soon as possible). Revisions relating to solar panels are effective March 2, 2021 (sellers may, however, implement the revisions sooner). Revisions relating to the maximum LTV for certain Home Possible Mortgages are effective for mortgages with settlement dates on or after April 1, 2021. All other updates are effective immediately.
Click to view the Freddie Mac Guide Bulletin 2020-45: https://www.tenaco.com/wp-content/uploads/2020/12/Freddie-Bulletin-2020-45.pdf
