Fannie Mae and Freddie Mac Issue Selling Guide Updates
Fannie Mae and Freddie Mac recently issued updates to their respective selling guides.
Fannie Mae issued Selling Guide Announcement (SEL-2022-01), which, among other things, includes changes to the following:
- Desktop appraisals – Allowing the use of desktop appraisals for certain purchase transactions of one-unit principal residences with LTV ratios less than or equal to 90% (effective March 19, 2022);
- Homestyle Renovation loans – Updated requirements to HomeStyle Renovation loans as follows: (1) renovation work must be completed within 15 months from the date the loan is closed; and (2) extensions beyond the 15-month timeframe will only be permitted due to the extenuating circumstances beyond the borrower’s control; and (3) additional information required in the renovation loan agreement (effective February 2, 2022);
- Loan-level price adjustment credit for HomePath properties – Providing a credit to the lender to reimburse the borrower for the cost of the appraisal when a loan securing a HomePath property is sold to Fannie Mae (effective February 2, 2022); and
- Asset Documentation – Updated documentation requirements for the verification of assets for certain refinance transactions underwritten in desktop underwriter (i.e., assets will not have to be documented when the funds required to be verified are $500 or less) (effective March 19, 2022).
Freddie Mac issued Bulletin 2022-2, addressing, among other matters, the following:
- Property eligibility and appraisals – Based on the success of the temporary COVID-19 appraisal flexibilities and a market appetite for appraisal options that do not require physical inspection, Freddie Mac is introducing an option to use a desktop appraisal in lieu of an interior and exterior inspection appraisal for certain transaction mortgages (effective March 6, 2022);
- Quality control – Additional flexibility for reverification of data received from Freddie Mac designated third-party service providers, and allowance of email reverifications of employment and income (effective February 2, 2022);
- Income and assets – Updated age of tax return requirements reflecting dates specific to the 2021 tax year, and additional specificity to Home Equity Lines of Credit (HELOCs) as an eligible source of funds towards the down payment, closing costs, and reserves, provided that the mortgage file includes evidence that the HELOC is secured by the borrower’s real property and that the HELOC proceeds have been disbursed to the borrower (effective February 2, 2022); and
- User forms and certificates – Announces the retirement of Affordable Merit Rate Mortgage note and rider (effective February 2, 2022).
