Freddie Mac issued Bulletin 2019-16 (Bulletin), announcing revisions to the Single-Family Seller/Servicer Guide. Per the Bulletin, Freddie Mac amended:
- area median income limits for Home Possible mortgages;
- Home Possible mortgage requirements relating to rental income from 1-unit primary residences;
- the Loan Product Advisor Asset and Income Modeler with respect to self-employed borrowers;
- IRS Form 4506-T signature requirements;
- age of documentation requirements for properties located in eligible disaster areas;
- delivery requirements in the Uniform Loan Delivery Dataset Addendum;
- the calculation of a borrower’s monthly housing expense;
- requirements related to asset accounts held in the name of a living trust;
- the Document Custodial Agreements for Single-Family Mortgages (Guide Forms 1035, 1035DC and 1035WF);
- the definition of Relocation Mortgage; and
- Loan Selling Advisor with respect to mandatory cash contracts and best efforts contracts.
Freddie Mac also extended the effective date for previously revised requirements limiting the number of financed residential properties owned in connection with a Home Possible Mortgage (now required for mortgages with settlement dates on or after September 16, 2019, rather than mortgages with settlement dates on or after July 3, 2019);
In addition, Freddie Mac extended the effective date of the new requirement to disclose environmental hazards to borrowers. The requirement now applies to mortgages with settlement dates on or after December 1, 2019 (rather than mortgages with settlement dates on or after August 1, 2019).
For manually underwritten loans, the revised income limits related to Home Possible Mortgages apply to loans with Application Received Dates on or after July 28, 2019. Loan Product Advisor and the Home Possible Income & Property Eligibility tool will be updated on July 28, 2019 to reflect the revised borrower income limit and the 2019 area median income limit.
Updates related to rental income from 1-unit primary residences are effective for mortgages with settlement dates on or after October 10, 2019 (sellers may, however, implement the updates immediately).
Updates to the Loan Product Advisor Asset and Income Modeler relating to self-employed borrowers are effective for loan originations submitted to Loan Product Advisor on or after September 8, 2019.
Updates for including real estate taxes when calculating the borrower’s monthly housing expense are effective for mortgages with settlement dates on or after October 10, 2019 (sellers may, however, implement the updates immediately).
All other updates are effective immediately.
