Changes being made by the Federal Home Loan Mortgage Corp. relax requirements for appraisals, condominiums and jumbo mortgages. Also impacted are assets used to make payments.
Freddie Mac is now allowing unlicensed and trainee appraisers to
perform and sign an appraisal report in accordance with state law. They can also perform a completion report as long as a supervisory appraiser signs it.
The secondary lender is eliminating the requirement that photos for comparable sales from multiple listing services
only be used when original photographs can’t be obtained.
Those details were discussed in Bulletin 2017-20.
On super-conforming mortgages,
appraisal field review reports will no longer be required when the loan-to-value ratio exceeds 75 percent and the value is at least $1 million.
Freddie additionally eliminated its requirements on super-conforming loans to use the lower value and for the
appraiser be qualified to perform appraisals without oversight or supervision.
Freddie will now allow five-year adjustable-rate mortgages to be used for super-conforming loans.
The 70 percent owner-occupancy requirement for new condominium projects is being reduced to 50 percent.
Another condominium requirement related to the home owners association’s master insurance policy is being changed to allow an individual unit owner policy to cover the interior of the unit or the improvements to the unit.
On loans where borrowers will utilize assets to make mortgage payments, depository accounts and securities are now eligible. But at least one borrower must be 62 years old, borrowers must be the sole owners of the assets and be able to access the entire amount as of the note date, and no withdrawal penalty can apply. In addition, any deposits exceeding 10 percent of total eligible assets need to be verified as being the borrower’s own funds.
Freddie said it will no longer limit the eligible portion of the balance of an asset
to 70 percent. But funds to be used for closing, gift funds, borrower funds and pledged assets must be deducted.
The notice outlined what portion of restricted stock can be considered for income.
The revised policies are immediately effective.
