Fannie Mae and Freddie Mac Release Sales Guide Updates | PC Weiner Brodsky Kider

Fannie Mae and Freddie Mac recently released updates to their respective sales guides.

Fannie Mae posted Sales Guide Announcement (SEL-2022-01)which includes, among others, the following changes:

  • Documentary Appraisals – Allowing the use of documentary appraisals for certain principal residence purchase transactions of a unit with LTV ratios less than or equal to 90% (effective March 19, 2022);
  • Home Style Renovation Loans – Updated requirements for Home Style Renovation Loans as follows: (1) Renovation work must be completed within 15 months of loan closing date; and (2) extensions beyond the 15-month period will only be permitted due to extenuating circumstances beyond the borrower’s control; and (3) additional information required in the Renovation Loan Agreement (effective February 2, 2022);
  • Loan Level Pricing Adjustment Credit for HomePath Properties – Provide 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 Feb. 2022); and
  • Documentation of Assets – Updated documentation requirements for verification of assets for certain refinancing transactions underwritten with a desktop underwriter (i.e. assets will not have to be documented when funds to be verified are $500 or less) (effective March 19, 2022).

Freddie Mac posted Bulletin 2022-2covering, among other things, the following points:

  • Property Eligibility and Valuations – Based on the success of temporary COVID-19 valuation flexibilities and a market appetite for valuation options that do not require physical inspection, Freddie Mac is introducing an option to use an office appraisal in lieu of an interior and exterior appraisal for certain transaction mortgages (effective March 6, 2022);
  • Quality Control – Added flexibility for re-verification of data received from third-party service providers designated by Freddie Mac, and the possibility of e-mail re-verifications of employment and income (effective February 2, 2022);
  • Income and Assets – Updated tax filing age requirements to reflect dates specific to the 2021 tax year and added specificity for home equity lines of credit (HELOCs) as a source of eligible funds for down payment, closing costs and reserves, provided the mortgage file includes evidence that the HELOC is secured by the borrower’s real estate and that the HELOC proceeds have been paid to the borrower (at effective February 2, 2022); and
  • Usage Forms and Certificates – Announcing the retirement of the Affordable Merit Rate Mortgage Note and Rider (effective February 2, 2022).

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