Fannie Mae issued Selling Guide Announcement SEL-2019-08 (Announcement), amending homeownership education requirements. Per the Announcement, at least one borrower must complete homeownership education prior to closing if:
- All borrowers on the loan are relying solely on nontradititional credit to qualify;
- The mortgage loan is a HomeReady purchase transaction and all occupying borrowers are first-time homebuyers (regardless of LTV ratio); or
- The mortgage loan is a purchase transaction, all borrowers are first-time homebuyers and the borrower’s LTV, CLTV or HCLTV ratios exceed 95%.
Fannie Mae also implemented new requirements with respect to the amount of rental income that can be used by a borrower for loan qualification purposes.
In addition, Fannie Mae amended requirements with respect to:
- Borrowers that have not yet started employment, but that have an employment offer or contract to start a job at some point after the application date (and no later than 90 days after the note date);
- Reporting anti-money laundering activity;
- Seasoning requirements for single-closing construction-to-permanent ARM loans;
- Monthly debt obligations; and
- Note endorsements.
Revisions with respect to homeownership education requirements apply to all new loan casefiles submitted to Desktop Underwriter on after December 7, 2019. With respect to HomeReady loans, the revisions are required for new loan applications dated on or after December 7, 2019. Revisions with respect to rental income requirements apply to all new loan casefiles submitted to Desktop Underwriter on after December 7, 2019. With respect to manually underwritten loans, the revisions are required for loans with application dates on or after December 7, 2019. Revisions with respect to reporting anti-money laundering activity are effective March 31, 2020 (lenders are, however, encouraged to implement the revisions immediately). All other revisions are effective immediately.
Click Here to View the Fannie Mae Selling Guide Announcement SEL-2019-08
