MPF Program Origination and Underwriting Updates for MPF Direct
On March 20, 2018, The Mortgage Partnership Finance Program announced origination and underwriting updates for its MPF Direct program. Specifically, changes were made to Direct Select QM, Select 90 QM, and Choice QM guidelines. These changes are effective immediately. Highlights of the changes are included below:
- Monthly payment calculation for student loans is revised to mirror Fannie Mae’s current approach.
- Requirement for tax transcripts is revised to allow for 2 years W-2 transcripts in lieu of tax transcripts when borrower’s income is limited to strictly W-2 wages.
- Two requirements added for self-employment: 1) to include a copy of the liquidity analysis if self-employment income analysis includes income from boxes 1, 2, or 3 on the K-1 that is greater than distributions on the K-1, and 2) the liquidity analysis, where required, must consider the reduction of those assets when the borrower is using business funds for down payment or closing costs.
- Documentation requirement added for disability income from a private or employer-sponsored policy to include copy of the policy or benefits statement to determine current eligibility, amount, frequency, and termination date (if any).
- Timing for existing distributions of retirement income is revised to be 6 months prior to the note date for borrower with no prior 2-year history of receipt of distributions
- Updated requirement for detached condominiums to no longer require project review.
A complete listing of the updated provisions can be viewed here: https://www.fhlbmpf.com/ANNOUNCEMENTS/Lists/announcements/Attachments/128/MPF%20Announcement%202018-19.pdf
We participate in the MPF program. Very helpful information