Freddie Mac issued Bulletin 2023-19 (Bulletin) announcing revisions to the Single-Family Seller/Servicer Guide. Per the Bulletin, Freddie Mac updated rental income requirements by:
- Removing the requirement that a lease have a minimum original term of 1 year;
- Specifying that for newly executed leases, the first rental payment due date must be no later than the first payment due date of the mortgage;
- Updating documentation requirements for receipt of 2 months’ rental income to require evidence the payments were cashed or deposited into the borrower’s depository account or transferred into a third-party money transfer application account owned by the borrower;
- Permitting documentation of receipt of the security deposit plus first month’s rental payment, in lieu of receipt of 2 months’ rental payments;
- Removing the appraisal requirement that at least one comparable sale must have an Accessory Dwelling Unit (ADU) that is rented, when rental income generated from an ADU on a subject 1-unit primary residence is used to qualify the borrower; and
- Reformatting the documentation requirements table for rental income generated from an ADU on subject 1-unit primary residence “no cash-out” refinance transactions.
Freddie Mac also updated desktop appraisal requirements by:
- Updating the eligibility list to prohibit refinance mortgages and mortgages secured by mixed-use properties, and to permit super conforming mortgages;
- Removing the requirement that the last feedback certificate indicate desktop eligibility; and
- Permitting lenders to deliver an appraisal report that exceeds the minimum collateral assessment requirement indicated by the last feedback certificate, provided the eligibility requirements for the selected appraisal type are met.
In addition, Freddie Mac clarified that when documentation other than the credit report is used to verify a borrower’s current student loan payment amount, the verified payment amount must be greater than zero.
Revisions related to rental income requirements are effective April 1, 2024. All other revisions are effective October 4, 2023.
Click to view the Freddie Mac Guide Bulletin 2023-19: https://www.tenaco.com/wp-content/uploads/2023/10/Freddie-Mac-Guide-Bulletin-2023-19-10-04-23.pdf
