AC-027 Important Credit Updates 10-24-23
FLCBank is providing credit policy updates on several recent announcements by Fannie Mae, Freddie Mac, FHA, and USDA.
Fannie Mae
3D Printed Homes – Acceptable Collateral
3D printed homes with a traditional design and constructed using conventional building materials are not considered unique or nontraditional housing types by Fannie Mae, thus standard eligibility, and comparable sales selection requirements as those for site-built housing will apply.
FLCBank accepts this update without overlay.
Self-Employment Requirements
A 2-year self-employment history is required to ensure that the income is stable. However, under certain circumstances, Fannie Mae accepts borrowers who have been self-employed for less than 2 years. The updated policy requires the borrower’s most recent signed personal and business tax return to denote a full year (12 months) of self-employment income from the current business.
In addition, the policy allowing one year of personal and business tax returns was updated to require both requirements to be present:
- All self-employed businesses must have been in existence for five years, and
- The borrower has had a 25% or greater ownership interest for the last five consecutive years.
This policy change is effective immediately on new loan applications “finaled” to FLCBank on October 26, 2023.
Freddie Mac
Appraisal Waiver Eligibility (ACE) Update
- Lenders cannot exercise the appraisal waiver when there is the gift of equity in the transaction. This update is effective immediately.
Desktop Appraisal Eligibility Update
- If the property securing the mortgage is classified as “mixed-use”, the lender cannot exercise the Desktop Appraisal option issued by the LPA. This update is effective immediately.
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