Updates to the Federal National Mortgage Association’s guidelines impact HomeReady loans, self-employed income and insurance requirements.
Prospective borrowers whose qualifying income is as much as 100 percent of the area median income will now be eligible for HomeReady loans.
In addition, no income limit will apply on HomeReady mortgages when the property securing the mortgage is located
in a low-income census tract.
Fannie Mae described the updates this week in Announcement SEL-2016-05.
On transactions where the borrower is self-employed, lenders will no longer be required to
document that the borrower has access to business income.
Instead, the Washington-based company is providing
guidance on how to assess business liquidity to ensure it can afford to distribute earnings to the borrower.
Fannie said it no longer will limit refinances on restructured mortgages.
Finally, on units in projects with master property insurance, the secondary lender is no longer requiring that it or the owner of the unit be listed in the mortgagee clause of that master insurance policy.
