Fannie Mae issued Selling Guide Announcement SEL-2016-08 (Announcement). The Announcement: introduces a new optional DU validation service for income; permits the waiver of appraisal requirements for certain refinance transactions (via a property inspection waiver); sets forth product enhancements for the HomeReady program, in an effort to expand access to credit; eliminates the need to conduct a project review with respect to “site condos”; introduces a new 3 month seasoning option under the Fannie Majors program; amends MBS pooling parameters for single, multiple lender, and Fannie Majors; eliminates the requirement to pay off garnishments prior to closing (garnishments must now be treated as recurring monthly obligations for qualifying purposes); removes the requirement to document or evaluate a co-borrower’s self-employment income when the co-borrower’s income is not used for qualifying purposes; updates the list of potential red flag messages in the Selling Guide to align with changes to the messages in DU; and revises Rhode Island and Massachusetts security instruments.
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