new mortgage guidelines

Mortgage Loan  Approvals
Freddie Mac Income changes and Asset changes.  

New requirements 2017 Mid year

 Freddie Mac selling guide section

Some of the current common reasons for using Freddie vs. Fannie are:
  • 1 mo. bank statement (vs. 2 mos. required by Fannie).  No change on this in July for streamline Accepts.
  • 1 year business and personal tax returns for self-employed borrowers (vs. 2 years most often required by Fannie). In July 2 years business and personal tax returns will be required for those businesses less than 5 years old.
  • Using K-1 income without it showing distributions.  In July Freddie will also require the lender to assess business liquidity before being able to use this income to qualify.
Some important changes to note:
  • Coming in July - When analyzing income over a 2 (+) year period, whether employed or self-employed, the trend and degree of fluctuation must be analyzed.
  • Coming in July – the loan LTV requirement for Assets as a Basis for Income will increase to 80%.  Currently is 70% LTV for both Fannie and Freddie.
  • Using business asset will require specific documentation requirements. 

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