Fannie Mae Updates Selling Guide
On April 3, 2019, Fannie Mae (Fannie) announced changes to the Selling Guide (the Guide) sections covering HomeReady ® mortgage loans, the self-report process, and additional topics. Included below are key points from Announcement SEL-2019-03.
HomeReady Mortgage Loans
For all HomeReady transactions, Fannie is imposing a maximum limit of two financed properties, including the subject property. However, the additional reserves required for multiple financed properties are not applicable to HomeReady loans. Financed properties owned by a non-occupant borrower do not need to be counted toward the maximum limit.
Fannie has also clarified that a boarder may not have an ownership interest in the property. Current guidance, stating that a boarder may not be obligated on the mortgage loan, is unchanged.
In addition, HomeReady loans combined with HomeStyle® Renovation are allowed to be delivered with the lower level of mortgage insurance permitted for the HomeReady transaction.
Although lenders may implement these policies immediately, these changes will be required for all Desktop Underwriter transactions upon the future release incorporating the updates. For manually underwritten loans, these policies must be applied for loans with application dates on or after June 15, 2019.
Effective Date for updated Form 1008
In December of 2018, after updating the Form 1008 Uniform Underwriting and Transmittal Summary, Fannie communicated an effective date of July 1, 2019 for use of the revised Form 1008. With this announcement, Fannie is moving the effective date to require mandatory use of the new Form 1008 for applications dated on our after February 1, 2020. This change aligns the required use of the revised Form 1008 with use of the new Uniform Residential Loan Application (Form 1003). Given this extension, Fannie and Freddie Mac are considering additional changes to the Form 1008.
Self-Report Process
With the transition to the Loan Quality Connect management system, the process for self-reporting will now occur more efficiently within that system than through the previously utilized email mailbox. Therefore, Fannie is updating the Guide to remove references to the mailbox and replace them with references to Loan Quality Connect.
Additional Updates The announcement also indicated that multiple servicers are now permitted for Fannie Majors, and made an update to the Guide’s glossary. The entirety of the announcement may be viewed here: https://www.fanniemae.com/content/announcement/sel1903.pdf
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